Canada Manufacturing Sector PMI Picks Up Again, Rising to 51 in February

By Robb M. Stewart

Canadian manufacturers' activity picked up for a second straight month in February, with conditions buoyed by rising volumes of new work and a rise in employment, data showed Monday.

The S&P Global Canada manufacturing purchasing managers index nudged up in the second month of the year to 51, after advancing to 50.4 in January, the first month in a year above the 50 threshold between contraction and expansion.

"February data indicated a positive month for the Canadian manufacturing sector as new orders returned to growth despite a backdrop of softening export sales and ongoing challenges arising from U.S. tariffs," said Tim Moore, economics director at S&P Global Market Intelligence.

Canadian factories and other trade-exposed sectors of the economy have borne the brunt of the Trump administration's shift to protectionist policies and its introduction of tariffs. Canada's economy contracted 0.6% on an annualized basis in the final quarter of last year as a big drawdown in business inventories dragged on activity. Still, household and government spending were up and exports overall continued to recover.

Gross domestic production rose a modest 0.2% in December from the month before, the strongest growth since September, but Statistics Canada's advance estimate indicated the economy stalled in January with a pullback in manufacturing and as the country faced snowstorms and severely cold temperatures.

S&P Global's survey showed new orders for Canada's manufacturers saw growth in February for the first time in 13 months. The upturn in new business reflected improving domestic demand, which helped to offset a sustained decline in export sales,

The data indicated a solid reduction in new work from abroad, although the rate of contraction eased to its softest pace since October. Survey respondents again widely commented on headwinds from U.S. tariffs, S&P Global said.

Manufacturing output was steady in February, continuing a stable trend seen so far in 2026. Some manufacturers noted a boost from rising workloads, while others cited caution about their production requirements and the impact of tight inventory strategies, S&P Global said. Stocks of finished goods have decreased for 12 months in a row, although the latest reduction was only marginal.

February saw another marginal increase in staffing numbers, with the rate of job creation since January the strongest for 13 months.

S&P Global's survey found Canadian manufacturers were upbeat about their overall prospects for output growth during the next 12 months. About 24% of those surveyed predicted an expansion, while only 9% forecast a reduction, which translated to the highest overall level of optimism since December 2024, despite confidence levels remaining much weaker than the long-run survey average.

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

(END) Dow Jones Newswires

March 02, 2026 10:08 ET (15:08 GMT)