Both Canadian and U.S. manufacturing activity grew in January, but at a slower pace than the past several months. Output for both countries was held back by material shortages and labour disruptions.
The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) fell to a seasonally adjusted 56.2 in January from 56.5 in December. More encouragingly, there were signs of easing inflationary pressures, with the measure of input prices dropping to the lowest level in 11 months, and stronger demand.
Likewise, in the U.S., demand and labour issues caused the manufacturing sector to expand at its slowest pace in 18 months. The IHS Markit final U.S. manufacturing PMI decreased to 55.5 in January from 57.7 in December.
A reading above 50 shows growth in the sector.
Designed to gauge the health of the manufacturing sector, the Markit Manufacturing Purchasing Managers' Index is a survey of industrial companies to measure the performance of the sector. It is different from the ISM Purchasing Managers’ Index uses a straight average, while the Markit uses a system such that forward-looking components carry a higher weight.
