The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) for August shows the strongest uptick in Canadian manufacturing output since December 2010.
However, the latest data also show a loss of momentum in new business growth. “Anecdotal evidence suggested that some clients had adopted a wait-and-see approach to spending in response to heightened business uncertainty and ongoing global trade tensions,” the report’s authors say.
Manufacturing input costs were driven up most sharply by steel and aluminum tariffs, while factory gate charges increased at one of the sharpest rates since the survey began in 2010.
The seasonally adjusted PMI dropped very slightly to 56.8 in August, from 56.9 in July, the weakest overall improvement in business conditions since May. Slower new business growth was the main factor. However, the figure still remained well above the long run survey average of 53.0.
Production volumes increased strongly in August, with manufacturers noting increased workloads and successful operating capacity increases at their plants.
Although export sales increased slightly, new growth slumped to a four month low. A rise in work from abroad was the greatest since May, driven in part by demand from energy sector clients. However there were reports that US trade tariffs hurt competitiveness.