Canada: Manufacturing PMI eases in April, but remains upbeat nonetheless
May 3, 2021
In April, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 57.2 from 58.5 in March. Nevertheless, the index remained well above the neutral 50-threshold, signaling an improvement in manufacturing operating conditions from the previous month.
In April, the PMI suggested momentum in manufacturing sector activity eased from the previous month due to slightly weaker expansions in new orders and output amid elevated Covid-19 cases and some tightening of restrictions. That being said, both new orders and output rose robustly relative to the previous month. Meanwhile, job creation remained strong despite easing slightly from the previous month’s pace. On the price front, input prices rose notably on the back of higher raw material prices and supply shortages, while output price inflation reached a survey record high.
Commenting on April’s reading, Shreeya Patel, an economist at IHS Markit, noted:
“Although data highlighted a positive overall demand picture, it continued to reveal strong concerns over future supply. Anecdotal evidence continued to link COVID-19 to severe delivery delays and the limited availability of raw materials. As a result, firms rushed to add to their pre-production stock levels, often paying highly inflated prices for inputs.”
Author: Steven Burke, Economist