Canada: Manufacturing PMI falls in July
The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to 47.8 in July from 49.3 in June. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing-sector operating conditions compared to the previous month.
July’s reading was primarily driven down by steeper reductions in manufacturing production and new orders. Market uncertainty, exacerbated by inflation and geopolitical tensions, affected demand domestically and internationally; sales to foreign clients saw the steepest decline since May 2020. In response, manufacturers cut back on their purchasing activities, with the decline in input buying being the steepest of the year so far. Supply-side constraints were evident, with lead times deteriorating significantly, partly due to delays in sea freight.
Finally, confidence in the outlook dropped to its lowest since May 2020, driven by concerns over inflation and high interest rates.