⭐ Start off 2025 with a powerful boost to your portfolio: January’s freshest AI-picked stocksUnlock stocks

Canadian factory PMI rises to 22-month high in December

Published 2025-01-02, 11:16 a/m
© Reuters. FILE PHOTO: People work at Honda's auto manufacturing plant in Alliston, Ontario, Canada April 5, 2023. REUTERS/Carlos Osorio/File Photo
USD/CAD
-
CAD/USD
-
SPGI
-

By Fergal Smith

TORONTO (Reuters) - Canadian manufacturing activity increased at the fastest pace in nearly two years in December as inventory accumulation by U.S. clients in anticipation of trade tariffs provided a measure of support for export sales.

The S&P Global (NYSE:SPGI) Canada Manufacturing Purchasing Managers' Index (PMI) rose to 52.2 in December from 52.0 in November, its highest level since February 2023 and the fourth straight month above the 50.0 no-change mark.

The average for the PMI in data going back to 2010 is 52.4. A reading above 50 indicates expansion in the sector.

U.S. President-elect Donald Trump is due to take office on Jan. 20 and is promising to impose a 25% tariff on all imports from Canada.

"Panellists are forecasting a near-term boost to sales ahead of these possible tariff changes, which helped bolster production expectations," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.

"However, the shape and extent of these tariffs remains unknown and led to considerable uncertainty amongst firms when assessing the outlook."

The future output index rose to 62.9 from 59.5 in November and the new export orders index was at its highest level since August 2023, improving to just short of the 50 threshold.

Some firms noted help from a weak Canadian dollar, which fell in December to the lowest level in nearly five years against its U.S. counterpart. A weaker currency could increase the competitiveness of Canada's exports.

Not all was positive for the sector. Average lead times for the delivery of inputs lengthened for a sixth month running, with the deterioration in vendor performance at its steepest since August.

"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," Smith said.

© Reuters. FILE PHOTO: People work at Honda's auto manufacturing plant in Alliston, Ontario, Canada April 5, 2023. REUTERS/Carlos Osorio/File Photo

A month-long strike by Canadian postal workers ended in mid-December after the country's labor relations board ordered an end to the work stoppage.

The measure of input costs rose to 57.5, its highest level since April 2023, as a stronger U.S. dollar raised the price of many imported goods.

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.