The latest IHS Markit Canada Manufacturing PMI (Purchasing Managers’ Index) finds Canada’s manufacturing sector enjoying “robust improvement.”
Output, new orders, employment and purchasing activity continue to increase in October, the survey found. Companies remain optimistic that global economic conditions will improve over the coming 12 months, supporting those expansions in output.
The headline seasonally adjusted PMI registered at 57.7 in October, up from 57.0 in September. The latest reading extended the period of growth to 16 successive months, with the latest expansion being the third strongest in over 11 years of data collection.
A main growth driver was a sharp upsurge in new orders amid improvements in domestic demand and new product launches. Exports also grew at the fastest rate since May 2018.
On the down side, supply-chain pressures continued to mount with firms registering a record lengthening in lead times. This, paired with greater client demand and concerns of future supply shocks, led companies to raise their pre-production inventories at a record pace.
Material scarcity for a wide range of inputs, as well as higher transportation and energy costs, led to a near-record rate of input cost inflation. Selling prices also rose, and at the second highest rate in the series history.
“Canada’s manufacturing sector has performed well over the course of the year, which was reflected in sentiment,” said IHS Markit economist Shreeya Patel. “Anecdotal evidence suggests firms are gearing up for another busy 12 months of trading.”
Read the full report.