Prior month 49.6S&P Global manufacturing PMI 48.4The index has been below the critical 50.0 no change more for 1/10 consecutive month Similar trends were observed for both production and new
orders. Firms continued to note a general air of uncertainty
in product markets, which resulted in subdued demand and
modest contractions in both output and new work. This was
again especially the case for new export trade, which fell for
a tenth successive month in November.Tariffs remained a
factor weighing on international demand.
The general lack of demand and falling production
requirements tended to discourage firms from hiring
additional workers in November.
Firms had enough capacity to handle workloads, shown by a steep and accelerated drop in backlogs—the sharpest contraction since July.
Business confidence stayed positive, supported by hopes that new product launches would attract new clients.
Overall confidence, however, remained historically subdued due to ongoing uncertainty, particularly around tariffs.
Despite expectations for higher production, firms cut purchasing activity and relied more on existing inventories.
Both buying activity and stocks of purchases posted their largest declines since July.
Longer supplier delivery times also pushed firms to use existing inventory, and many reported shortages of inputs at vendors.
Tariffs and higher supplier charges raised input costs in November, though overall inflation slowed to its weakest pace in over a year.
This softer cost environment contributed to a slower rise in output prices, with competitive pressures further limiting firms’ ability to increase selling prices.
From Paul Smith, Economic Director:
Canada’s manufacturing sector remained in the
doldrums during November, experiencing concurrent
– and accelerated – drops in output and new orders.
Market uncertainty, again linked to tariffs especially
in relation to international trade, was again noted by
panellists as leading to subdued performance.
Firms were subsequently keen to utilise existing
capacity to deal with current workloads and generally
refrained from purchasing inputs or replacing any
leavers at their plants. Workforce numbers subsequently
fell further.
However, there is some hope that the worst is behind
the sector. The contraction in November was relatively
shallow (despite accelerating since October), whilst
the impact of tariffs on prices is fading with input
price inflation dropping to its lowest level in over a
year. With selling charges also rising at a below-trend
pace, inflationary pressures appear increasingly well
contained heading into the end of 2025.
This article was written by Greg Michalowski at investinglive.com.