Canada: Manufacturing PMI continues to ease in June, but remains firmly in expansionary territory
In June, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) fell from 57.0 in May to 56.5. Nevertheless, the index remained well above the neutral 50-threshold, signaling another strong improvement in manufacturing operating conditions from the previous month.
In June, the PMI suggested momentum in manufacturing sector activity ticked down slightly from the previous month due to a more moderate expansion in output, employment levels and new orders. That being said, both post and pre-production inventories expanded robustly relative to the previous month. On the price front, output prices rose notably albeit at a softer rate than May’s series record high, and predominately due to heightened input price inflation, which firms mostly passed on to clients.
Commenting on the latest print reading, Shreeya Patel, an economist at IHS Markit, noted:
“Although latest data revealed a moderation in output and new order growth at the Canadian manufacturing sector, it continued to highlight a robust expansion. Moreover, a record uptick in pre-production inventory holdings suggests firms are gearing up for another busy quarter while a rise in backlogs could see job creation continue.”