From Yahoo Finance: 2025-05-01 09:40:00

Canadian manufacturing activity saw a sharp decline in April, with the S&P Global Canada Manufacturing Purchasing Managers’ Index falling to 45.3, its lowest level since May 2020. Uncertainty over U.S. trade policy weighed on production and new orders, with output and new orders measures also dropping.

The uncertain trade environment, especially regarding tariffs, led to hesitancy and delayed decision making in the sector. Capital goods producers reported significant falls in output and new work, with input prices remaining high and delivery times for inputs worsening.

Canada sends 75% of its exports to the U.S., including steel, aluminum, and autos facing hefty duties. The Bank of Canada warns that a prolonged global trade war could trigger a recession and inflation in Canada, with supplier delivery times lengthening despite reduced demand for inputs.

Despite some firms looking towards a more stable market in the future, confidence remains subdued, as reflected in the Future Output Index rising to 50.4 from 45.1 in March. Delays at ports and customs points, along with rising prices, continue to affect the manufacturing sector.

Read more: Canadian factory PMI hits near five-year low on tariff uncertainty