FX.co ★ Canada Manufacturing PMI Drops to 5-Year Low

The S&P Global Canada Manufacturing PMI registered a decline to 45.3 in April 2025, down from 46.3 in March. This marks the third consecutive decrease in factory activity, reaching its lowest level since May 2020. The downturn is primarily driven by significant reductions in both production and new orders. Companies have pointed out that tariffs and unpredictable U.S. trade policies heavily impacted demand, causing declines in production and new orders at a pace not observed since the peak of the COVID-19 pandemic, and leading to a most substantial five-year drop in new export orders. With workloads decreasing, manufacturers reduced staffing for the third consecutive month, while backlogs diminished at the most rapid rate since May 2020. This situation has led to cuts in both purchasing activity and inventory levels. In terms of pricing, input cost inflation remains significantly high, compelling firms to increase output charges. Despite an overall subdued sentiment, confidence bounced back to a three-month high as some companies anticipate a more stable environment in the coming year.