- Prior was 52.0
This is the best reading since February 2023.
- Output and new orders show solid growth
- Some US clients stockpiling ahead of expected Trump tariffs in 2025
- Port and postal strikes causing supply chain disruptions
- Input cost inflation highest since April 2023
The Canadian manufacturing sector ended 2024 on a positive note, with the PMI hitting its best level in nearly two years.
Employment continued growing for a fourth straight month, though the pace slowed. Input costs accelerated to an 8-month high, partly due to CAD weakness.
Looking ahead, manufacturers are more optimistic, with confidence hitting an 18-month high. However, uncertainty around the scope and timing of potential US tariffs is weighing on the longer-term outlook.
Commenting on the latest survey results, Paul Smith, Economics Director at S&P Global Market Intelligence said:
“Canada’s manufacturing sector enjoyed a relatively positive end to 2024, with overall growth ticking up to its best level in nearly two years. Panellists reported a general uplift in demand and hinted at some sales growth to US clients given the expectation that President elect Trump will impose tariffs on Canadian goods in 2025 (although overall exports in December were broadly unchanged).
“Panellists are forecasting a near-term boost to sales ahead of these possible tariff changes, which helped bolster production expectations. However, the shape and extent of these tariffs remains unknown and led to considerable uncertainty amongst firms when assessing the outlook.
“Finally, bottlenecks in domestic supply chains remained prevalent in December, with various port and postal strikes leading to considerable challenges for inbound production inputs and outbound shipping from manufacturers’ warehouses. The result was a noticeable lengthening of vendor delivery times and a record increase in inventories of finished goods in December.”
There is some reason for optimism here but it's tough to say how much is stockpiling. It certainly runs against the narrative of a weakening Canadian economy.
