Canada: Manufacturing PMI posts a modest increase in January
February 3, 2020
In January, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) inched up to 50.6 from 50.4 in December. January’s PMI reading recovered slightly from December’s four-month low, and also remaied above the neutral 50-threshold, therefore signaling an improvement in manufacturing operating conditions from the previous month.
January’s outturn reflected a meager expansion in output, and was likely due to subdued foreign demand as new export orders fell for the fourth consecutive month in January. Headcounts also fell in January—the first time since April 2019—and likely tied to temporary factors such as the shutdown of Ontario’s century-old General Motors auto factory in mid-December.
Going forward, a positive developments on the US.-China trade front, a rebound in demand from Chinese firms for Canadian manufactured goods and the probable ratification of the USMCA should support the manufacturing sector this year.
Author: Steven Burke, Economist