Canadian manufacturing PMI falls as trade tensions dent output, new orders

By Fergal Smith

TORONTO, Dec 1 (Reuters) - Canada's manufacturing sector contracted at a steeper pace in November as trade uncertainty continued to hold back output and new orders, data showed on Monday.

The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to 48.4 last month from 49.6 in October. That marked the second-highest reading in the last 10 months but lengthened the period that the PMI has spent below the 50 threshold. A reading below 50 indicates contraction in the sector.

"Canada's manufacturing sector remained in the doldrums during November," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. "Market uncertainty, again linked to tariffs, especially in relation to international trade, was again noted by panelists as leading to subdued performance."

Talks have broken down on a trade deal in key sectors between the U.S. and Canada, while the United States-Mexico-Canada Agreement, which has shielded much of Canada's exports from U.S. tariffs, is up for joint review in 2026.

The output index declined to 48.0 from 49.8 in October and the new orders measure was at 47.4, down from 48.8.

"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," Smith said.

The employment index fell to 48.5 from 49.0 in October, but inflation measures showed an easing of price pressures.

The input price index declined to 56.6, its lowest level since October 2024, while the output price measure was at 53.1, down from 54.0 in October, as competitive pressures kept selling prices in check. (Reporting by Fergal Smith; Editing by Paul Simao)