Canadian factory PMI shows sector contracting for first time in 2026
TLT•Canada’s manufacturing PMI fell to 49.6 in October from 51.5 in September, the first reading below 50 since December, as output and new orders declined. Input costs and output prices rose to their highest levels in more than four years, at 71.7 and 62.3, respectively.
1. Manufacturing contracts
Canada’s manufacturing sector contracted in October for the first time this year, with the S&P Global Canada Manufacturing PMI falling to 49.6 from 51.5 in September. A reading below 50 signals contraction; the index had last been below that level in December.
2. Output and orders fall
The output index dropped to 48.4 from 50.8, while new orders fell to 46.5 from 49.3, their lowest reading since September 2025. Firms also reported the longest average input delivery lead times since August 2022, amid tariffs, geopolitical uncertainty and supply-chain disruption.
3. Price pressures intensify
Input-cost and output-price measures rose to 71.7 and 62.3, their highest levels in more than four years. S&P Global Market Intelligence economics director Paul Smith said firms faced concurrent drops in output and new orders, alongside intensifying price pressures. The Bank of Canada raised its benchmark interest rate by 25 basis points to 2.50% the previous Wednesday and said further increases might be needed to prevent higher energy costs from fueling broader inflation.
