FX.co ★ Canada Factory Activity Drops for 8th Straight Month

The S&P Global Canada Manufacturing PMI decreased to 47.7 in September 2025, down from 48.3 in August, indicating an ongoing contraction in Canadian factory activity. This marks the eighth consecutive month of decline in the manufacturing sector, largely due to tariffs imposed by the US on Canadian products and subsequent retaliatory tariffs by Canada. Significant decreases were observed in both new orders and output, attributed to weakened demand from Canada's primary trading partner. As a result, companies continued to lower staffing levels for the eighth month in a row, although the rate of job losses was the mildest since February. Meanwhile, input inflation remained high, though slowing compared to August, and the increase in selling prices was the weakest observed in nearly a year, easing some underlying cost pressures. Looking forward, businesses remain apprehensive about the future due to unpredictable policy shifts and tariffs, with business confidence dipping from the seven-month peak observed in August and continuing to fall short of the historical average.