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A weld curtain hangs between two operators working on the underbody of a Dodge Grand Caravan at FCA's Windsor Assembly Plant on May 8, 2020.FCA/Reuters

Canadian manufacturing activity contracted for the fourth straight month in June as the coronavirus crisis curbed demand from domestic and export markets, but was well above April’s record-low hinting at a turnaround, data showed on Thursday.

The IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI) rose to a seasonally adjusted 47.8 in June from 40.6 in May, well above April’s 33.0. A reading below 50 shows contraction in the sector. “The latest Canada Manufacturing PMI highlights a vastly improved situation in comparison to that seen over the previous three months,” said Tim Moore, economics director at IHS Markit, in a statement.

“June data signalled that the overall downturn in output, order books and jobs eased to its least marked since the COVID-19 pandemic took hold.”

The output index rose to 45.5 in June from 33.0 in May, while the measure of new orders was up to 45.5 from 37.9.

“Despite another improvement in their expectations for production during the year ahead, manufacturers continued to report highly subdued underlying demand in June,” Moore said.

The measure of suppliers’ delivery times rose to 37.5 from 30.9 in May, while the employment index was up at 44.8 from 32.7.

Canada unexpectedly added almost 290,000 jobs in May as some provinces loosened COVID-19 restrictions on businesses, while GDP was estimated to rise 3 per cent in May.

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