Canada Manufacturing Sector PMI Slips to 48.4 in November With Steeper Falls in Output, New Orders

By Robb M. Stewart

Canadian manufacturing activity weakened further in November, with steeper pullbacks in output and new orders as uncertainty lingers for the beleaguered sector, data showed Monday.

The S&P Global Canada manufacturing purchasing managers index slipped to 48.4, marking a 10th successive month of contraction after strengthening slightly to 49.6 in October. A reading of 50 represents no change.

Manufacturing in the country has been hit hard by uncertainty and a fall in demand in the U.S. in the wake of the Trump administration's tariffs, and the sector remained in the doldrums during November, said Paul Smith, economics director at S&P Global Market Intelligence.

With worries about international trade still high, Smith said companies have been keen to use existing capacity to deal with their current workloads and generally have refrained from purchasing inputs or replacing any workers who leave their plants.

"However, there is some hope that the worst is behind the sector. The contraction in November was relatively shallow, despite accelerating since October," he said.

The survey showed the effect of tariffs on prices is fading, with input price inflation in November dropping to the lowest level in more than a year, while selling prices rose at a below-trend pace.

Canada's economy grew a much stronger-than-expected 2.6% annualized in the third quarter, boosted by a recovery in exports and a jump in government defense spending that more than made up for weakness in household spending and flat business investment. Still, the final quarter began on shaky ground, with Statistics Canada estimating industry-level gross domestic product contracted 0.3% in October from the month before, which would market the sharpest decline since December 2022.

S&P Global's latest survey found manufacturers continued to note uncertainty in product markets, which led to subdued demand in November and modest contractions in output and new work. Again, the weakness was found particularly in new export trade, which declined for a 10th month in a row.

Companies continue to shun replacing job leavers, which in November led to a modest overall fall in staffing levels and also represented a 10th consecutive month where employment overall has dropped.

S&P Global said that with limited expectations for growth, manufacturers continued to reduce purchasing activity and instead focused on using existing stocks wherever possible. Both buying activity and stocks of purchases declined at the fastest paces since July.

Confidence broadly remains subdued, though S&P Global said there is some hope among companies that new product launches will help them to secure new clients.

Canada's government has adopted measures to help protect trade-exposed segments of the economy, including a move late last month to further tighten limits on imported steel and boost financing available to lumber producers. U.S. and Canadian officials were in talks this fall about a narrower trade deal that would provide tariff relief on steel and aluminum, but President Trump suspended talks in October.

In addition to sector-specific tariffs on goods including aluminum, steel and lumber, American tariffs on Canada currently stand at 35%, with energy products at 10%, though goods that comply with the U.S.-Mexico-Canada Agreement are carved-out of the duties.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

December 01, 2025 10:20 ET (15:20 GMT)