Purchasing Managers' Index™
MARKET SENSITIVE INFORMATION

Markit Canada Manufacturing PMI™

Key findings:

  • Headline PMI rises to 51.5 from 51.1 in October
  • Output rebounds amid fastest rise in new orders since April
  • Strongest rate of charge inflation for two-and-a-half years

Data collected November 11-24

Markit Canada Manufacturing PMI (PDF, 393 KB)

Markit Canada Manufacturing PMI dec1 2016

Canadian manufacturers reported a modest improvement in business conditions during November, driven by a rebound in production volumes and the fastest rise in new work since April. The latest survey also highlighted an upturn in staffing numbers and greater levels of input buying. At the same time, input cost inflation accelerated to its strongest since July 2014, which contributed to the fastest rise in manufacturers’ output charges in two-and-a-half years.

The seasonally adjusted Markit Canada Manufacturing Purchasing Managers’ Index™ (PMI™)edged up to 51.5 in November, from 51.1 in October, to remain above the neutral 50.0 threshold for the ninth consecutive month. Moreover, the latest improvement in overall business conditions was the strongest recorded since July.

November data indicated a return to rising output levels, following the stagnation recorded during the previous month. Although only marginal, the increase in manufacturing production was the fastest since August. Anecdotal evidence cited improving new order books, greater export sales and signs of a rebound in energy sector spending in particular.

The latest survey highlighted that new business growth picked up to a seven-month high, supported by the first rise in export orders since June. Manufacturers noted that inventory building among clients and exchange rate depreciation against the U.S. dollar had provided an uplift to new work received from abroad.

Cautious stock policies continued across the manufacturing sector in November, which some firms linked to heightened uncertainty about the demand outlook. Warehouse inventories of finished goods decreased for the eighth successive month, while stocks of purchases were broadly unchanged in November.

Despite manufacturers reporting a degree of concern about the outlook for client spending, the latest survey indicated that job creation was maintained in November. Moreover, the latest rise in payroll numbers was the strongest since July. Input buying also picked up during the latest survey period, which was linked to greater sales and the need to replenish inventories.

Supplier performance continued to deteriorate in November, although to the least marked degree since February. Longer lead-times were generally linked to transportation delays during the latest survey period.

Meanwhile, manufacturers reported a solid increase in their factory gate charges during November, which ended a two-month period of price discounting. The rate of inflation was the fastest recorded since May 2014, which was widely linked to higher cost burdens. Reflecting this, the latest survey indicated that input price inflation accelerated to its fastest for over two years in November, driven by higher imported raw material costs.

Regional highlights:

  • Alberta & B.C. was the best performing region monitored by the survey in November
  • Manufacturers in Alberta & B.C. reported the fastest rise in new orders since August 2014
  • Ontario and Quebec recorded lower volumes of new work, largely reflecting weaker export sales

Comment:

Tim Moore, Senior Economist at survey compilers IHS Markit:

“November’s survey reveals a return to growth for manufacturing production and one of the fastest rises in new orders seen since the end of 2015. Improving business conditions reflected greater sales to both domestic and export clients, which contributed to stronger staff hiring among manufacturing firms. Meanwhile, cost pressures intensified in November, with input prices rising at the sharpest pace since July 2014. In contrast to recent months, manufacturers sought to pass through some of the rise in raw material costs, meaning that factory gate prices also increased at the strongest rate since mid-2014.”

Mike Whelan, Chair, SCMA National Board:

“Canada’s manufacturing sector regained some momentum in November, helped by the fastest growth in new orders for seven months. There were also signs that export demand has picked up from the weak patch seen in the third quarter of 2016. These improved business conditions contributed to sustained job creation and greater input buying by manufacturing firms.

“However, input cost pressures continued to build up in November, driven by higher imported raw material prices. This resulted in the fastest rise in factory gate charges for two-and-a-half years.

“There was a mixed picture across Canada. Alberta & British Columbia saw the fastest upturn in new orders since August 2014 and also saw growth in employment for the first time since 2014. Ontario and Quebec experienced a modest slowdown in new orders in November, linked to softer exports.”

For further information, please contact:

IHS Markit                                                                   
Tim Moore, Senior Economist                           
Telephone +44-1491-461-067                                                     
Email This email address is being protected from spambots. You need JavaScript enabled to view it.

Joanna Vickers, Corporate Communications
Telephone +44-207-260-2234
E-mail This email address is being protected from spambots. You need JavaScript enabled to view it.

Supply Chain Management Association

Mike Whelan, Chair, SCMA National Board                                
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Amanda Cormier, Director, Public Affairs & Communications
Telephone: +001-416-542-3860
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Note to Editors:
The Markit Canada Manufacturing PMI™ Report is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 industrial companies. The panel is stratified by company workforce size and by Standard Industrial Classification (SIC) group, based on industry contribution to Canada GDP.

Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the ‘Report’ shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’.

Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease. The Markit Canada Manufacturing Purchasing Managers’ Index™ (PMI™) is a composite index based on five of the individual indexes with the following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers’ Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times Index inverted so that it moves in a comparable direction.

The Purchasing Managers’ Index (PMI) survey methodology has developed an outstanding reputation for providing the most up-to-date possible indication of what is really happening in the private sector economy by tracking variables such as sales, employment, inventories and prices. The indices are widely used by businesses, governments and economic analysts in financial institutions to help better understand business conditions and guide corporate and investment strategy. In particular, central banks in many countries (including the European Central Bank) use the data to help make interest rate decisions. PMI surveys are the first indicators of economic conditions published each month and are therefore available well ahead of comparable data produced by government bodies.

Markit does not revise underlying survey data after first publication, but seasonal adjustment factors may be revised from time to time as appropriate which will affect the seasonally adjusted data series. Historical data relating to the underlying (unadjusted) numbers, first published seasonally adjusted series and subsequently revised data are available to subscribers from Markit. Please contact This email address is being protected from spambots. You need JavaScript enabled to view it..

About Supply Chain Management Association

The Supply Chain Management Association (SCMA) is Canada’s largest association for supply chain management professionals. We represent 7,500 members as well as the wider profession working in roles that cover sourcing, procurement, logistics, inventory, and contract management. SCMA sets the standards for excellence and ethics, and is the principal source of professional development and accreditation in supply chain management in Canada. www.scma.com.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and expertise to forge solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. All other company and product names may be trademarks of their respective owners © 2016 IHS Markit Ltd. All rights reserved.

About PMI

Purchasing Managers’ Index® (PMI®) surveys are now available for over 30 countries and also for key regions including the eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends. To learn more go to www.markit.com/economics.

The intellectual property rights to the Markit Canada Manufacturing PMI™ provided herein are owned by or licensed to IHS Markit. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without IHS Markit’s prior consent. IHS Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon.  In no event shall IHS Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are either registered trade marks of Markit Economics Limited or licensed to Markit Economics Limited. IHS Markit is a registered trademark of IHS Markit Ltd.