- Prior month 45.3
- Canada may manufacturing PMI 46.1
Looking at the details from the S&P global:
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Headline PMI: 46.1 in May (up from 45.3 in April)
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Below 50.0 for the 4th consecutive month → continued contraction
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Production & Orders:
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Output and new orders declined again; contractions remained steep
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International demand especially weak; export orders fell more than domestic
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Clients hesitant to place new orders due to tariff uncertainty
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Inventories & Supply Chains:
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Input and finished goods inventories cut further to reduce stock costs
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Some firms dipped into inventories due to supplier delays
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Vendor delivery times worsened again amid port congestion and customs delays
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Prices & Inflation:
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Input cost inflation accelerated, near March’s 31-month peak
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Tariffs cited as key reason for higher input prices (e.g., livestock, metals, plastics)
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Firms raised output prices, though the rate of increase was at a 3-month low
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Employment & Capacity:
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Job losses for 4th straight month; steepest since June 2020
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Backlogs of orders declined but less sharply than in April
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Spare capacity remains elevated
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Purchasing Activity:
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Purchasing volumes cut for 5th straight month (since January)
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Contraction in buying reflects lower production needs
-
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Business Sentiment:
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Confidence remained subdued
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Hopes for macro stability, but trade policy concerns dominate outlook
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U.S. trade flows remain weak
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Paul Smith,
Economics Director at S&P Global Market Intelligence
said:
“With manufacturers continuing to be hit by tariffs and
trade uncertainty, May saw the sector experience a
further significant contraction. Although declines were
softer than in April, both production and new orders
again fell to noticeable degrees amid reports that
market demand was weak – again largely because of
tariffs.
“Moreover, the hard to predict nature of trade policies
means the outlook for production remains extremely
uncertain and given the recent scale of the downturn
in the sector, job losses are mounting. Indeed, latest
data showed the steepest decline in employment since
the height of the COVID pandemic in 2020 with spare
capacity and rising costs also an increasing problem for
many firms.
“Unsurprisingly, tariffs remain the primary source of
price pressures, whilst also leading to an intensification
of supply side delays. No wonder firms therefore
remained circumspect in their purchasing and inventory
management decisions during May, with the survey again
revealing declines in both input buying and stocks.”
This article was written by Greg Michalowski at www.forexlive.com.
