Canadian factory PMI hits six-month low in September on trade frictions

By Fergal Smith

TORONTO, Oct ‌1 (Reuters) - Canada's manufacturing ​sector ​expanded at the slowest pace in six months in September as trade frictions and elevated energy prices weighed on ‌activity, while confidence in the outlook dropped to the lowest ⁠level in nine months.

The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to ‌51.5 last month from 53.0 in ‌August, marking the lowest level since March. A reading above 50 indicates expansion in the sector.

• “Canada’s manufacturing economy showed a degree of ​resilience in the face of several headwinds during September," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “However, tariffs and ⁠elevated global energy prices due to the war in Iran continued to have a damaging ​impact on the sector."

• A US import ban on many Canadian alcoholic beverages, motorcycles and dairy products took effect ​on Tuesday after talks involving President ‌Donald Trump and Prime Minister Mark Carney broke down in August.

• The output index dipped to 50.8 from ⁠52.8 in August, while the new orders measure slipped below the 50 threshold for the first time since March.

• “These issues didn’t just cause present difficulties, such ⁠as around stock and production management, but also added to a pervading uncertainty ​amongst clients and manufacturers alike especially given the seemingly intractable nature of trade tensions with the US and the ongoing conflict in the Middle East," Smith said.

• ‌The future output index fell to its lowest level since December 2025 at 54.6, down from 58.7 ‌in August, while delivery delays grew the most widespread since August 2022 ⁠and inflation pressures intensified.

• The ‌measure of input costs ​rose to 71.1 from 66.4 in August, notching its highest level since July 2022.

(Reporting by Fergal Smith; Editing by ‌Chizu Nomiyama )

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