Canada: Manufacturing sector deteriorates at a softer pace in June
July 2, 2020
In June, the IHS Markit Manufacturing Purchasing Managers’ Index (PMI) increased from 40.6 in May to 47.8. Nevertheless, the index remained below the neutral 50-threshold, signaling a deterioration in manufacturing operating conditions from the previous month.
June’s result reflected softer declines in output, new orders and employment, as lockdown measures eased across most of the country. On the price front, input prices increased notably, which was mainly attributed to a depreciation of the CAD against the greenback. Looking ahead, less than half of the businesses surveyed expected a rise in production volumes over the next 12 months.
Commenting on the print, Tim Moore, economics director at IHS Markit, noted:
“The proportion of survey respondents indicating a monthly drop in production has eased from 66% in April and 47% in May to only 30% during June. This shift in momentum has been driven by a phased reopening of factory operations and the restart of business activity among clients.”
Author: Steven Burke, Economist