May 30, 2023

Canada Markit December manufacturing PMI 56.5 vs 57.2 prior

Markit Canada PMI chart Dec 2021

  • Prior was 57.2
  • Fastest uptick in pre-production orders since the survey began 11 years ago
  • Production outlook at 5-month low
  • Material shortages restraining production
  • Panelists mentioned that whilst firms were
    able to source skilled labour it was not sufficient to tame a rise in

This is not generally a market-moving report but it points to a healthy Canadian manufacturing sector, which isn’t a surprise. The question is if consumer demand will hold up as prices move higher and deliveries are delayed.

Commenting on the latest survey results, Shreeya
Patel, Economist at IHS Markit, said:

“Canadian manufacturers closed 2021 with a robust
expansion in operating conditions as the sector
continues to reap the benefits of strong domestic and
international demand. Moreover, anticipation of greater
customer orders encouraged firms to stockpile at record
rates during December.

“Whilst on the whole latest data are positive, it is difficult
to ignore the impacts of the pandemic on the sector.
Over the last year or so, material shortages have been
prominent, and whilst production has continued to
expand, the latest uptick was the softest for ten months.
In addition, another marked rise in backlogs suggests
persisting skill shortages.

“News of the Omicron variant paired with sustained
supply shortages has been a cause for concern among
some Canadian manufacturers. The impacts of the new
variant are still unknown, but policy-makers remain
committed to containing the virus.”

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