Canada PMI March 2019


Canada: IHS Markit manufacturing PMI sags in March

April 1, 2019

In March, the seasonally-adjusted IHS Markit Manufacturing Purchasing Manager’s Index (PMI) fell sharply to 50.5 from 52.6 a month earlier, marking the weakest expansion in two-and-a-half years. The index nevertheless remained above the 50-point threshold, signaling an ongoing expansion in manufacturing activity.

March’s reading reflected softer job creation and manufacturing output. Survey respondents cited a slowdown in global trade flows and decreased competitiveness due to higher raw material prices—specifically steel—as the main drivers behind March’s meagre gain. Moreover, depressed demand induced a fall in new export orders and a reduction in backlogs of work, while business sentiment in March was downbeat.

March’s PMI reading comes amid a global slowdown in manufacturing activity, particularly in Asia and the Eurozone, partly the result of ebbing economic growth in China and trade policies in the United States. A resolution to the China-U.S. trade war and ratification of the USMCA would support manufacturing activity going forward.

FocusEconomics Consensus Forecast panelists expect fixed investment to decrease 1.0% in 2019, which is down 1.7 percentage points from last month’s forecast. For 2020, our panel projects fixed investment to increase 2.2%.

Author:, Economist

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Canada PMI Chart

Canada PMI March 2019

Note: IHS Markit Purchasing Managers’ Index. A reading above 50 indicates an expansion in purchasing activity while a value below 50 indicates a contraction.
Source: IHS Markit.

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