Canada: Manufacturing PMI ticks down in December
In December, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) dipped to 56.5 from November’s 57.2. Consequently, the index remained above the neutral 50-threshold, but signaled a marginally weaker improvement in manufacturing operating conditions from the previous month.
In December, the PMI suggested momentum in manufacturing sector activity moderated modestly from the previous month due to a slightly softer expansion in output, which was tied to ongoing supply chain disruptions, and goods and staff shortages. That said, demand remained upbeat, while employment levels increased in December relative to the previous month. On the price front, both input and output prices continued to rise in December, but at a slightly softer rate compared to November.
Commenting on the latest print reading, Shreeya Patel, an economist at IHS Markit, noted:
“Canadian manufacturers closed 2021 with a robust expansion in operating conditions as the sector continues to reap the benefits of strong domestic and international demand. […] News of the Omicron variant paired with sustained supply shortages has been a cause for concern among some Canadian manufacturers. The impacts of the new variant are still unknown, but policy-makers remain committed to containing the virus.”