Canada Manufacturing Sector Grows for Fourth Straight Month

S&P Global reported that Canada's manufacturing sector expanded for the fourth consecutive month in July 2026. The Canada Manufacturing Purchasing Managers’ Index (PMI) rose to 53.5, marking the strongest improvement in operating conditions since June 2022, fueled by a rise in production and new orders.

While domestic activity grew, new export orders declined for a second consecutive month. This downturn is attributed to the impact of tariffs and ongoing conflict in the Middle East. These same geopolitical pressures drove input cost inflation to a four-year high, specifically inflating the cost of steel, transportation, and energy.

To meet increasing demand and protect against potential supply chain disruptions, manufacturers increased both purchasing activity and employment. Despite these gains, overall business confidence fell to its lowest level since March, as companies struggle with persistent inflation and global geopolitical uncertainty.