FX.co ★ Canada Factory Activity Contracts for 5th Month

The S&P Global Canada Manufacturing PMI decreased to 45.6 in June 2025, down from 46.1 the previous month, marking the fifth consecutive month of declining factory activity. This decline is driven by the most significant drop in output in over five years and a continued sharp fall in new orders. Tariffs and erratic U.S. trade policies have adversely affected demand, echoing production and new orders from spring 2020 and resulting in one of the survey's steepest drops in export orders. Reduced workloads have led to five months of consecutive job cuts and significantly decreased backlogs, prompting further reductions in purchasing activity and inventory levels. Tariff-induced supply chain delays forced companies to deplete stocks as lead times extended. Although input cost inflation slowed to a four-month low, it remained high, leading firms to increase their output prices. While confidence reached its highest point since January, it remained muted due to ongoing trade uncertainties.