By Robb M. Stewart


Canadian manufacturing activity deteriorated slightly last month after modest improvements of late, with a slight drop in production as new orders declined, data showed Wednesday.

The S&P Global Canada manufacturing purchasing managers index fell to 49.4 in April from 49.8 the month before. The measure has remained below the 50 threshold that separates expansion from contraction for a full year now.

"April's survey data revealed another relatively subdued performance of Canada's manufacturing sector," Paul Smith, economics director at S&P Global Market Intelligence, said.

Smith said output and new orders both fell at slightly faster rates last month, which led manufacturers to again cut buying activity and focus on the utilization of existing inventories, which several survey panelists mentioned remain too high.

After stalling in the second half of last year, Canada's economy has rebounded and Statistics Canada has estimated industry-level growth was 2.5% in the first quarter. The Bank of Canada, which has left its benchmark interest rate unchanged at a more than two-decade high at each of the last six policy meetings, has forecast growth will continue this year.

Still, on a monthly basis gross domestic product by industry has slowed following a strong start to 2024, with growth on-month of 0.2% in February and early data pointing to essentially unchanged GDP in March.

S&P Global said output volumes declined for a ninth consecutive month in April as lower sales again led firms to reduce production levels. New orders fell for a 14th successive month, and while modest the decline was the steepest since January amid reports that high prices and soft market demand were weighing on sales, the survey found.

It said weak underlying global demand was also reported to have led to a reduction in new export orders in April, extending the downturn to eight months. Still, S&P Global said there was slight increase in employment by manufacturers that reflected efforts to stay on top of workloads.

The survey showed manufacturers retained confidence in the outlook and on the whole expect to see output rise from present levels in the coming 12 months, while sales volumes are forecast to rise amid hopes of a pickup in demand.


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


(END) Dow Jones Newswires

05-01-24 1011ET