Canada Manufacturing Growth Slows Amid U.S. Trade Dispute
Canada's manufacturing sector saw slowing growth in September as retaliatory tariffs and U.S. import bans hindered export demand and increased input costs.
The Government of Canada saw a slowdown in manufacturing momentum during September, with the Manufacturing Purchasing Managers’ Index dropping to 51.5 from 53 in August. While the sector expanded for a sixth straight month, growth has been hampered by escalating trade tensions with the United States and high energy prices resulting from the war in Iran.
The downturn follows a collapse in trade negotiations, leading Prime Minister Mark Carney to impose retaliatory tariffs on U.S. goods. In response, the United States implemented an import ban on Canadian whey products, alcoholic beverages, and motorcycles. These actions have triggered a four-month decline in new export orders and demand as U.S. buyers become hesitant.
Despite these challenges, the sector added 22,000 jobs in August, with 14,100 of those positions located in Ontario. However, input cost inflation has climbed to its highest level since July 2022, offsetting some of the gains from employment growth.
