The IHS Markit Canada Manufacturing Purchasing Managers’ Index posted 55.5 in April, slightly down from 55.7 in March.
IHS Markit says that while this is the lowest reading in 2018 so far, the number still indicates “a strong overall improvement in manufacturing sector business conditions.”
In April Canadian manufacturing experienced the fastest rise in incoming new work since the start of 2018. Export demand picked up and new orders from abroad posted increased faster than they have since March 2011.
Negatives included a rapid increase in unfinished work as sales volumes outstripped production capacity in April, while supply chain disruptions also constrained output growth. The latest decline in supplier performance was the worst since October 2010. Shortages of truck drivers south of the border, added to delays at ports in China – the result of stronger environmental policies coming into effect – meant that lead times for materials went up.
Demand for raw materials drove input costs up, while manufacturers leveraged strong demand to pass on prices at the factory gate at the fastest pace since 2011.
Manufacturing companies reported strong increases in hiring in April, attributable to rising workloads and long-term efforts to boost capacity in response to constraints on production schedules. Overall business optimism about future growth is the strongest it’s been in 12 months.
Regional highlights:
• All regions experienced an improvement in manufacturing business conditions during April.
• Quebec was the best performing area, with overall growth the fastest since May 2012.
• Quebec also saw the strongest new export sales growth.
• Alberta & BC posted the fastest rate of manufacturing sector job creation.
