Key facts
- Canada's manufacturing sector expanded in June, with the PMI rising to 53.0.
- Production and employment within the sector saw increases.
- Supply shortages intensified, leading to cost inflation reaching a near four-year high.
- Supplier delivery times lengthened significantly due to Middle East shipping disruptions.
- Input costs rose to their highest level since July 2022, influenced by oil prices and tariffs.
Canada's manufacturing sector showed signs of continued expansion in June, with the S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) rising to 53.0 from 52.9 in May. This marks the sixth consecutive month the index has remained above the 50 threshold, indicating growth.
Production and employment within the sector increased, with the employment measure reaching its highest level since October 2024. Firms added staff to manage rising workloads. However, underlying trends revealed significant supply-side disruptions, partly driven by stockpiling efforts as companies and clients grappled with extended delivery times.
Suppliers' delivery times lengthened to their greatest extent since September 2022, attributed to shipping route disruptions caused by the conflict in the Middle East. Elevated oil prices, increased transportation costs, and U.S. tariffs further contributed to a surge in input costs, pushing the input price index to 67.2, its highest point since July 2022. Business confidence within the sector consequently slipped to a three-month low.