Canada’s manufacturing sector expands as Iran war drives stockpiling and supply concerns
Canada's manufacturing sector expanded in April 2024 at its fastest pace since June 2022, driven by stockpiling amid supply concerns linked to the Middle East conflict. The S&P Global Manufacturing PMI rose to 53.3, with increases in output, new orders, and input prices, reflecting inflationary pressures from energy costs and supply chain disruptions. Analysts caution that the growth stems more from war-related uncertainty than sustained demand, raising concerns for central bank policymakers monitoring inflation.
- ▪Canada’s S&P Global Manufacturing PMI rose to 53.3 in April 2024, up from 50.0 in March, indicating expansion after a period of stagnation.
- ▪The increase in manufacturing activity is largely attributed to stockpiling due to supply chain concerns arising from the Middle East war, particularly involving Iran and the closure of the Strait of Hormuz.
- ▪The input price index reached 64.8 in April, the highest since August 2022, driven by higher fuel and freight costs alongside existing U.S. tariffs on key sectors.
- ▪The Bank of Canada has warned it may implement consecutive interest rate hikes if high oil prices continue to push inflation upward.
- ▪Vendor delivery times deteriorated to 45.4 in April, the steepest decline since March 2023, signaling worsening supply chain delays.
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Open this photo in gallery:Maple is cut at Industrie Ergie, a company that specializes in veneer face manufacturing, in Victoriaville, Que.Christinne Muschi/The Canadian PressShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountCanada’s manufacturing sector expanded in April at the fastest pace in nearly four years as the war in the Middle East spurred stock building and added to inflation pressures, data showed on Friday.The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to 53.3 last month from 50.0 in March, marking the highest level since June, 2022.
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