Canada: IHS Markit manufacturing PMI contracts for first time in over three years in April
In April, the IHS Markit Manufacturing Purchasing Manager’s Index (PMI) fell to 49.7 from 50.5 a month earlier. The index thus fell below the 50-point threshold, signaling the first contraction in manufacturing activity since February 2016.
April’s reading reflected reductions in new orders, job creation, and output. Weak demand led manufacturers to reduce purchases and streamline their inventories. Survey respondents continued to cite a slowdown in global trade and reserved spending among clients. Moreover, weaker sales among manufacturers lead to production and job cuts in April.
Commenting on April’s print, Christian Buhagiar, CEO at SCMA, noted:
“Canadian manufacturers reported subdued demand conditions in both domestic and external markets during April, which was often linked to a slowdown in global trade volumes and more cautious spending among clients.”
Going forward, the manufacturing sector will likely remain somewhat depressed as uncertainty over the ratification of the USMCA weighs on investment decision-making and purchasing activity.