Canada’s manufacturing sector contracted for an 11th straight month in December as trade uncertainty contributed to a steeper decline in output and new orders, data showed on Friday.
The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) edged up to 48.6 last month from 48.4 in November, extending its streak of readings below the 50 threshold since February. A reading below 50 indicates contraction in the sector.
“Canada’s manufacturing economy ended the year on a subdued note,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “Once again, tariffs remained an important theme amongst PMI survey respondents, with a general air of uncertainty continuing to negatively weigh on current and expected output levels for the year ahead.”
Prime Minister Mark Carney has said an agreement with the United States on key sectors was unlikely, saying the issue would be covered in a planned review of the United States-Mexico Canada trade pact in 2026.
The output index fell to 47.8 from 48.0 in November, and the new orders measure was at 47.3, marking a three-month low.
“Purchasing activity was also cut again in December, although supply-chain delays continue, and the price of inputs shifted higher – which firms once again closely linked to tariffs,” Smith said.
The input price index rose to 56.9 from 56.6 in November, while the output price measure was at 54.7, its highest level since June, as firms tried to pass on higher input costs to clients.