Explosive Growth in Canadian Factory Activity Driven by Improving Demand

Data released on Wednesday showed that Canadian manufacturing activity grew at a quicker pace in February, with both output and new orders reaching nine-month highs, and inflation pressures continuing to ease.

The seasonally adjusted S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) rose to 52.4, its highest level since July, from 51.0 in January. This marked the second consecutive month of growth since the index dipped below the 50 thresholds in November 2021.

The new orders indicator increased to 53.3 from 50.3 in January, while the output index rose to 52.2 from 51.0. Despite the fact that new orders for export have decreased for nine months running.

The input price index dropped to 57.9, the lowest level since July 2020, while the output index for the future rose to 61.6, the highest level since July.

The positive data was seen as "a relatively positive set of data concerning the health of the Canadian manufacturing economy," according to Paul Smith, Economics Director at S&P Global Market Intelligence.