{"id":670210,"date":"2026-01-03T02:08:13","date_gmt":"2026-01-03T02:08:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/670210\/"},"modified":"2026-01-03T02:08:13","modified_gmt":"2026-01-03T02:08:13","slug":"canada-december-manufacturing-index-edges-higher-but-remains-below-50-for-11th-month","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/670210\/","title":{"rendered":"Canada December manufacturing index edges higher but remains below 50 for 11th month"},"content":{"rendered":"<p data-path-to-node=\"3\" data-v-4026719d=\"\"><strong data-path-to-node=\"3\" data-index-in-node=\"0\" data-v-4026719d=\"\">The Canadian manufacturing sector remains stuck in the mud as the final Canadian S&amp;P Global survey of manufacturers was released. <\/strong><\/p>\n<p data-path-to-node=\"4\" data-v-4026719d=\"\">It\u2019s another soft reading for the Canadian economy, and the details here are painting a stagflationary picture that the Bank of Canada isn&#8217;t going to like.<\/p>\n<p data-path-to-node=\"5\" data-v-4026719d=\"\">Here are the details from the S&amp;P Global Manufacturing PMI for December:<\/p>\n<ul data-v-4026719d=\"\">\n<li data-v-4026719d=\"\">\n<p data-path-to-node=\"6,0,1\" data-v-4026719d=\"\">48.6 vs 48.4 prior.<\/p>\n<\/li>\n<li data-v-4026719d=\"\">\n<p data-path-to-node=\"6,0,1\" data-v-4026719d=\"\"><strong data-path-to-node=\"6,1,1,0\" data-index-in-node=\"0\" data-v-4026719d=\"\">Output Index:<\/strong> Declined at a quicker rate<\/p>\n<\/li>\n<li data-v-4026719d=\"\">\n<p data-path-to-node=\"6,2,1\" data-v-4026719d=\"\"><strong data-path-to-node=\"6,2,1,0\" data-index-in-node=\"0\" data-v-4026719d=\"\">New Orders with a &#8216;s<\/strong>olid decline&#8217;<\/p>\n<\/li>\n<li data-v-4026719d=\"\">\n<p data-path-to-node=\"6,2,1\" data-v-4026719d=\"\"><strong data-path-to-node=\"6,3,1,0\" data-index-in-node=\"0\" data-v-4026719d=\"\">Employment:<\/strong> 11th consecutive month of job shedding.<\/p>\n<\/li>\n<li data-v-4026719d=\"\">\n<p data-path-to-node=\"6,2,1\" data-v-4026719d=\"\"><strong data-path-to-node=\"6,4,1,0\" data-index-in-node=\"0\" data-v-4026719d=\"\">Prices:<\/strong> Selling price inflation hit a six-month high.<\/p>\n<\/li>\n<\/ul>\n<p data-path-to-node=\"8\" data-v-4026719d=\"\">The report explicitly blames tariffs for driving up prices while simultaneously killing demand. Fortunately, the consumer side of the economy has remained strong as manufacturing gets left behind. A year of prolonged uncertainty around USMCA negotiations isn&#8217;t going to help.<\/p>\n<p data-path-to-node=\"9\" data-v-4026719d=\"\">Firms reported that average lead times lengthened because of customs delays, specifically with US imports. Even worse, the uncertainty around trade policy is causing a &#8220;general air of uncertainty&#8221; that is weighing on output for the year ahead, something that will hit capex<\/p>\n<p data-path-to-node=\"10\" data-v-4026719d=\"\">Paul Smith, Economics Director at S&amp;P Global:<\/p>\n<blockquote data-path-to-node=\"11\" data-v-4026719d=\"\">\n<p data-path-to-node=\"11,0\" data-v-4026719d=\"\">\u201cCanada\u2019s manufacturing economy ended the year on a<br \/>\nsubdued note, with output and new orders both falling<br \/>\nagain \u2013 as they have done in each month of 2025 apart<br \/>\nfrom January. Once again, tariffs remained an important<br \/>\ntheme amongst PMI survey respondents, with a general<br \/>\nair of uncertainty continuing to negatively weigh on<br \/>\ncurrent and expected output levels for the year ahead.<br data-v-4026719d=\"\"\/><br \/>\n\u201cThis means firms remain naturally cautious, and<br \/>\nseeking an operating leanness, either in terms of labour<br \/>\ncapacity or inventory holdings. Purchasing activity was<br \/>\nalso cut again in December, although supply-chain<br \/>\ndelays continue, and the price of inputs shifted higher \u2013<br \/>\nwhich firms once again closely linked to tariffs.\u201d <\/p>\n<\/blockquote>\n<p data-path-to-node=\"13\" data-v-4026719d=\"\"><strong data-v-4026719d=\"\">This is a reminder that there are problems in Canadian manufacturing as this survey <\/strong>has been in contraction for 11 straight months, shedding jobs the whole way down. Normally, that would scream for more cuts but  look at the inflation component: Input price inflation picked up, and selling price inflation is at a six-month high. Firms are passing those tariff costs right along to consumers.<\/p>\n<p data-path-to-node=\"13\" data-v-4026719d=\"\">USD\/CAD is up 16 pips on the first real trading day of 2026 after falling about 5% last year.<\/p>\n<p data-path-to-node=\"13\" data-v-4026719d=\"\">Yesterday, I wrote a <a href=\"https:\/\/investinglive.com\/forex\/canadian-dollar-outlook-2026-tariff-risks-are-overblown-20260101\/\" target=\"_blank\" class=\"article-link\" data-v-4026719d=\"\" rel=\"noopener\">Canadian dollar outlook for 2026<\/a> and later today I will be on BNNBloomberg TV talking about it.<\/p>\n","protected":false},"excerpt":{"rendered":"The Canadian manufacturing sector remains stuck in the mud as the final Canadian S&amp;P Global survey of manufacturers&hellip;\n","protected":false},"author":2,"featured_media":670211,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-670210","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115828733190313759","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/670210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=670210"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/670210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/670211"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=670210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=670210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=670210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}