Canada’s manufacturing output hit a seven-month high in October as domestic and international demand remained strong despite persistent bottlenecks in the global supply chains.
The IHS Markit Canada Manufacturing Purchasing Managers’ Index rose to 57.7 on the month, up from 57.0 in September, marking the sixteenth consecutive month of growth, according to data released on Monday.
Material shortages, combined with high energy and transportation costs, all resulted in higher costs of production as well as extensive delays in delivery. High demand meant that companies had been able to pass on these costs.
Even with the higher cost of production, materials and transportation, producers continued to increase their inventories and hiring in anticipation of robust demand in the upcoming year.
October’s PMI presents yet another indicator of the Canadian economic recovery. Manufacturing may still have a few turbulent months ahead while the knots in the supply chain are resolved.
Nevertheless, manufacturing as a sector in Canada has performed particularly well throughout the pandemic, and companies have reason to maintain an optimistic outlook.