Canadian factory activity grows at record pace despite surging costs
9:53 am Friday, April 01st, 2022
TORONTO (Reuters) – Canadian manufacturing activity expanded at a record pace in March as restrictions to contain the coronavirus pandemic eased and demand conditions improved, although the Russia-Ukraine war contributed to mounting cost pressures, data showed on Friday.
The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 58.9 in March from 56.6 in February, posting its highest level in the 11-year history of the survey. A reading above 50 shows growth in the sector.
“Canada’s manufacturing sector again enjoyed a bustling month of trading in March,” Shreeya Patel, an economist at S&P Global said in a statement. “Key to growth were robust uplifts in output, new orders and purchases.”
The output index rose to its highest level since March last year and the measure of new orders climbed as well.
Higher sales were attributed by manufacturers in part to the relaxation of pandemic restrictions, S&P Global said. Ontario, Canada’s most populous province, dropped its mask mandate in most locations last week.
Still, concerns over input shortages and delivery delays led to record levels of stockpiling, while the input price index jumped to a survey-record high of 78.6 from 70.1.
“With demand showing no signs of letting up and the knock-on effects of the war in Ukraine, we can expect to see prices rising at elevated rates for at least the duration of the year,” Patel said.
Western sanctions imposed on Russia over its invasion of Ukraine have disrupted oil supplies, driving prices higher. Moscow calls its Ukraine action a “special military operation”.
(Reporting by Fergal Smith)
