Canada: Manufacturing PMI improves in May
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) came in at 56.8 in May, up from April’s 56.2. As such, the index moved further above the 50.0 no-change threshold, signaling a faster improvement in business conditions compared to the previous month.
May’s uptick was driven by faster growth in output, new orders and employment. Moreover, purchasing activity expanded at a record rate as firms raced to meet demand, which was aided by the fading impact of the pandemic. Backlogs increased at the fastest pace in six months despite efforts to boost capacity. Finally, raw material scarcity, ongoing supply-chain disruption and lockdowns in China kept cost pressures elevated.
Shreeya Patel, economist at S&P Global Market Intelligence, said:
“Canada’s manufacturing sector has recovered well from the pandemic, registering output growth in almost every month for the last two years. Demand continues to flourish while firms are committed to growing their businesses through a variety of different ventures including product development, improving e-commerce, investing in new machinery and expanding their operations. As a result, companies have struggled to keep up with demand, though severe labour and material shortages can also be blamed. This is likely to persist given recent lockdowns in China and ongoing geopolitical tensions.”