The pace of growth in the Canadian manufacturing sector signalled a robust improvement in business conditions during March, which continued the positive trends seen throughout the first quarter of 2018.
The Canada Manufacturing Purchasing Managers’ Index (PMI) registered 55.7. The reading is up from 55.6 in February. A reading above 50 shows growth in the sector.
The headline PMI reading in March was supported by a robust and accelerated rise in production volumes across the manufacturing sector. A number of survey respondents noted that strong client demand had resulted in efforts to boost production capacity at their plants.
New order volumes increased at a robust pace in March, which marked eighteen months of sustained expansion. Anecdotal evidence suggested that greater sales to domestic and export clients had underpinned the latest upturn in new business intakes. There were also some reports that clients had brought forward spending in response to the prospect of factory gate price rises related to higher raw material costs.
March data pointed to sustained pressure on operating capacity across the manufacturing sector,as highlighted by another solid rise in backlogs of work. A number of survey respondents noted that sales growth had outstripped production capacity at their plants in recent months.
Tim Moore, associate director at survey compilers IHS Markit, says, “Manufacturers remain relatively upbeat about their growth prospects for the coming 12 months, reflecting healthy order books and ongoing efforts to boost production capacity. The main concern at present is overstretched supply chains, as highlighted by another steep lengthening of delivery times for raw materials and semi-manufactured inputs.”