IHS Markit Canada Manufacturing PMI®
02 Luglio 2019 - 4:30PM
Business Wire
Production falls at fastest pace for three-and-a-half years
Key findings:
Further declines in output and incoming new work
Survey-record reduction in backlogs of work
Input cost pressures remain much weaker than in 2018
June data signalled another difficult month for the Canadian
manufacturing sector, with falling volumes of new work contributing
to the sharpest drop in production for three-and-a-half years.
Survey respondents commented on more subdued economic conditions in
both domestic and export markets, alongside a drag on sales from
global trade frictions.
At 49.2 in June, the headline seasonally adjusted IHS Markit
Canada Manufacturing Purchasing Managers’ Index® (PMI®) picked up
fractionally from May's 41-month low of 49.1. However, the latest
reading was below the crucial 50.0 no-change value for the third
month running, which marks the longest period of decline since
2015/16.
A sharper reduction in production was the main factor weighing
on the headline PMI in June. The downturn in output accelerated
since the previous month and was the fastest since December 2015.
Manufacturers generally cited a lack of new work to replace
completed orders at their plants. Reflecting this, the latest
survey revealed the steepest fall in backlogs of work since data
collection began in October 2010.
The lack of pressure on operating capacity across the
manufacturing sector largely reflected a sustained deterioration in
order books during June. Lower volumes of new work have been
recorded in each of the past four months, although the latest
decline was only modest and slower than seen in May.
Export sales were unchanged in June, which ended a three-month
period of decline. Some manufacturers noted a boost to export sales
from the removal of US trade tariffs on steel and aluminium.
However, there were also reports that softer underlying demand in
US markets and ongoing global trade frictions had held back total
new orders from abroad.
In contrast to the reductions signalled for output and incoming
new work, latest data pointed to a rise in employment numbers for
the second month running. However, the rate of job creation was
only marginal. A number of manufacturers suggested that softening
client demand had encouraged more cautious staff hiring strategies.
Moreover, latest data revealed a drop in business optimism towards
the year-ahead outlook, which was partly attributed to concerns
that global trade frictions would act as a brake on manufacturing
sector performance.
Meanwhile, manufacturers pointed to the sharpest drop in
purchasing activity since December 2015. Weaker demand for
materials and lower steel prices led to subdued cost pressures,
with input price inflation holding close to the 52-month low seen
in May. Where a rise in input prices was reported, manufacturers
often cited greater transportation bills and the pass-through of
higher trade tariffs on China by US suppliers.
At the same time, intense competitive pressures contributed to
the slowest rise in prices charged by Canadian manufacturers in the
current 32-month inflation sequence.
COMMENT
Commenting on the PMI data, Tim Moore, Economics Associate
Director at IHS Markit said:
"Manufacturing business conditions remained on a downward path
during June, according to the latest PMI data. Output fell to the
largest extent for three-and-a-half years as a lack of new work to
replace completed orders continued to act as a brake on production
schedules. In fact, unfinished work decreased at the sharpest rate
since the survey began in 2010. "The latest survey results provide
a clear sign that US-China trade frictions are holding back the
Canadian manufacturing sector. New orders have now decreased for
four months in a row, with survey respondents widely commenting on
subdued export demand and weaker global trade volumes so far this
year. Moreover, manufacturers indicated that their business
optimism dropped sharply in June and was among the weakest seen
since the start of 2016."
Methodology
The IHS Markit Canada Manufacturing PMI® is compiled by IHS
Markit from responses to questionnaires sent to purchasing managers
in a panel of around 400 manufacturers. The panel is stratified by
detailed sector and company workforce size, based on contributions
to GDP. Survey responses are collected in the second half of each
month and indicate the direction of change compared to the previous
month. A diffusion index is calculated for each survey variable.
The index is the sum of the percentage of ‘higher’ responses and
half the percentage of ‘unchanged’ responses. The indices vary
between 0 and 100, with a reading above 50 indicating an overall
increase compared to the previous month, and below 50 an overall
decrease. The indices are then seasonally adjusted. The headline
figure is the Purchasing Managers’ Index® (PMI). The PMI is a
weighted average of the following five indices: New Orders (30%),
Output (25%), Employment (20%), Suppliers’ Delivery Times (15%) and
Stocks of Purchases (10%). For the PMI calculation the Suppliers’
Delivery Times Index is inverted so that it moves in a comparable
direction to the other indices. Underlying survey data are not
revised after publication, but seasonal adjustment factors may be
revised from time to time as appropriate which will affect the
seasonally adjusted data series. June 2019 data were collected
12-24 June 2019. For further information on the PMI survey
methodology, please contact economics@ihsmarkit.com.
About IHS Markit
IHS Markit (NYSE: INFO) is a world leader in critical
information, analytics and solutions for the major industries and
markets that drive economies worldwide. The company delivers
next-generation information, analytics and solutions to customers
in business, finance and government, improving their operational
efficiency and providing deep insights that lead to well-informed,
confident decisions. IHS Markit has more than 50,000 business and
government customers, including 80 percent of the Fortune Global
500 and the world’s leading financial institutions. IHS Markit is a
registered trademark of IHS Markit Ltd. and/or its affiliates. All
other company and product names may be trademarks of their
respective owners © 2019 IHS Markit Ltd. All rights reserved.
About PMI
Purchasing Managers’ Index® (PMI®) surveys are now available for
over 40 countries and also for key regions including the eurozone.
They are the most closely watched business surveys in the world,
favoured by central banks, financial markets and business decision
makers for their ability to provide up-to-date, accurate and often
unique monthly indicators of economic trends. To learn more go to
ihsmarkit.com/products/pmi.html.
Disclaimer
The intellectual property rights to the data provided herein are
owned by or licensed to IHS Markit. Any unauthorised use, including
but not limited to copying, distributing, transmitting or otherwise
of any data appearing is not permitted without IHS Markit’s prior
consent. IHS Markit shall not have any liability, duty or
obligation for or relating to the content or information (“data”)
contained herein, any errors, inaccuracies, omissions or delays in
the data, or for any actions taken in reliance thereon. In no event
shall IHS Markit be liable for any special, incidental, or
consequential damages, arising out of the use of the data.
Purchasing Managers’ Index® and PMI® are either registered trade
marks of Markit Economics Limited or licensed to Markit Economics
Limited. IHS Markit is a registered trademark of IHS Markit Ltd.
and/or its affiliates.
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version on businesswire.com: https://www.businesswire.com/news/home/20190702005430/en/
IHS Markit Tim Moore Associate Director T: +44-1491-461-067
tim.moore@ihsmarkit.com Katherine Smith Corporate Communications T:
+1 (781) 301-9311 katherine.smith@ihsmarkit.com
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