Canada: IHS Markit manufacturing PMI sags in March
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.