Canada PMI December 2021

Canada

Canada: Manufacturing PMI ticks down in December

January 4, 2022

In December, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) dipped to 56.5 from November’s 57.2. Consequently, the index remained above the neutral 50-threshold, but signaled a marginally weaker improvement in manufacturing operating conditions from the previous month.

In December, the PMI suggested momentum in manufacturing sector activity moderated modestly from the previous month due to a slightly softer expansion in output, which was tied to ongoing supply chain disruptions, and goods and staff shortages. That said, demand remained upbeat, while employment levels increased in December relative to the previous month. On the price front, both input and output prices continued to rise in December, but at a slightly softer rate compared to November.

Commenting on the latest print reading, Shreeya Patel, an economist at IHS Markit, noted:

“Canadian manufacturers closed 2021 with a robust expansion in operating conditions as the sector continues to reap the benefits of strong domestic and international demand. […] News of the Omicron variant paired with sustained supply shortages has been a cause for concern among some Canadian manufacturers. The impacts of the new variant are still unknown, but policy-makers remain committed to containing the virus.”

FocusEconomics Consensus Forecast panelists expect fixed investment to rise 6.7% in 2022, which is down 1.2 percentage points from last month’s forecast. For 2023, our panel projects fixed investment to increase 1.7%.


Author:, Economist

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Canada PMI Chart


Canada PMI December 2021

Note: IHS Markit Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit.


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