Canadian manufacturers recorded robust rises in output, new orders and employment during July, thereby signalling another marked improvement in overall business conditions across the sector.
However, the latest Manufacturing Purchasing Managers Index (PMI) survey from Markit Canada also signaled a steep and accelerated rise in prices charged by manufacturing firms, which was widely linked to the impact of U.S. trade tariffs on steel and aluminium.
At 56.9 in July, the seasonally adjusted IHS Markit fell only slightly from June’s survey record high of 57.1 and remained indicative of a
strong improvement in overall business conditions.
The headline index was supported by the fastest rise in production volumes since March 2017, which partially offset softer rates of new business growth and job creation compared to the previous month.
Markit also indicated that July data pointed to a robust increase in new work received by manufacturing firms, with the rate of expansion only slightly softer than June’s four-and-a-half-year peak. The slowdown partly reflected a weaker contribution from export order growth, which was the least marked since March.
Markit also says manufacturers are upbeat about the outlook for production levels at their plants in the next 12 months. The degree of positive sentiment eased fractionally since June, but remained broadly in line with the average so far in 2018. Resilient business confidence and another solid rise in backlogs of work underpinned sustained employment growth in July.
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