Canada’s manufacturing economy remained inside contraction territory during August, with output, new orders and employment all declining since July albeit at noticeably slower rates compared to earlier in the year, S&P Global’s Canada Manufacturing Purchasing Managers’ Index (PMI) for August found.The PMI was recorded at 48.3 for August, up from 46.1 in July and the highest reading since January. However, by remaining below the critical 50.0 no-change mark for the seventh consecutive month, the PMI signalled continued sector contraction.“Canada’s manufacturing economy continued to struggle in the face of tariffs and uncertainty in August although, somewhat positively, to a noticeably lesser degree than earlier in the year,” said Paul Smith, economics director at S&P Global Market Intelligence said in a media release. “Although continuing to decline, output, new orders and employment all recorded slower falls compared to July.A lack of demand, especially from international markets due to tariffs, was again widely noted by manufacturers.Tariffs also continued to underpin inflationary pressures, with prices rising to a stronger degree than in July, whilst custom delays and logistical challenges led to a further lengthening of lead times, the company reported in a press statement.Confidence in the future improved but remained well below trend, with continued uncertainty in the outlook, plus sales weakness, leading firms to make further cuts to employment and purchasing activity.The relatively better PMI reading reflected slower falls in both output and new work. Production declined at the slowest rate since February, whilst new orders contracted to the weakest degree in the current seven-month downturn.However, firms again bemoaned a lack of market demand for their products, often commenting on the reticence of clients to commit to new contracts against the backdrop of trade tariffs. This was especially the case with U.S. clients, who remained a key source of lower overall international sales in August.The disruptive impact on trade of tariffs was also reflected in the latest data on prices and supplier performance. Regarding the latter, customs delays and logistical challenges due to tariffs were reported to have underpinned a further deterioration in supplier vendor performance in August, the fourteenth in as many months.On the price front, tariffs were overwhelmingly mentioned as having raised the cost of inputs, with metals like aluminium and steel especially impacted.Input price inflation overall was at its highest level for three months, and firms were keen to pass these on to clients wherever possible. This was reflected in a slightly firmer rise in output charges compared to July.The unusually uncertain outlook, plus continued underperformance in current sales, led firms to further trim labour capacity. Noting a combination of layoffs and the non-replacement of leavers, employment numbers overall declined for a seventh successive month (albeit to the weakest degree since April). (ICE TORONTO)

Fonte notizia: https://www.automationmag.com/