FX.co ★ Canada Manufacturing Activity Slows Further

The S&P Global Canada Manufacturing PMI increased slightly to 46.1 in July 2025, up from 45.6 in June, yet the index still indicates a downturn in Canada's private sector manufacturing activities. This marks the sixth consecutive month of decline, exacerbated by tariffs from the United States on Canadian products and Canada's retaliatory duties. Notably, there were significant declines in both new orders and production levels, although the rate of this decline was somewhat slower compared to June, primarily due to reduced demand from the United States, Canada's biggest trading partner. The ongoing lack of demand led companies to reduce their workforce for the sixth month in a row, with the pace of job cuts accelerating. On a positive note, the increase in input prices has eased to its lowest level since November 2024, falling below the long-term average. Similarly, the rise in output prices was the smallest recorded since February. Moving forward, businesses remain concerned about unclear future prospects, largely due to unstable policy shifts.