Canada factory activity sees strong growth despite supply shocks

Canadian manufacturing activity grew in September at a pace that was little changed from the prior month’s robust level, while global supply shocks helped to lift measures of inflation to record highs, data showed on Friday.

The IHS Markit Canada Manufacturing Purchasing Managers’ Index (PMI) dipped to a seasonally adjusted 57.0 in September from 57.2 in August, but not far off March’s record-setting pace of 58.5.

It was the 15th straight month that the PMI was above the 50 threshold marking growth in the sector.

“Canada’s manufacturing sector recorded another healthy improvement in operating conditions in September despite infection rates rising in key provinces,” Shreeya Patel, an economist at IHS Markit, said in a statement.

Canada continues to battle a Delta-driven fourth wave of coronavirus infections, while pandemic restrictions have contributed to bottlenecks globally.

“Material scarcity led to higher prices, shipping delays, and subsequent increases in incomplete work,” Patel said. “Anecdotal evidence suggests firms sought to clear their backlogs but a lack of skilled workers hindered productivity.”

The measure of outstanding business accumulated matched the series high from June 2018, rising to 56.6 from 55.6 in August, while the indexes for input prices and output prices climbed to the highest levels on record.

Still, firms remained optimistic about prospects for growth, with the future output index climbing to the highest level since May 2019.