On Monday, 2 March ’26, data reflected that Canada’s manufacturing sector surged for a 2nd straight month in February ’26. This was due to an increase in new business despite weak export sales and rising inflation pressures.
The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI), a measure of factory sector health, climbed to 51.0 last month from 50.4 a month before in January. This posted its highest level since a year before in January ’25. Any reading above 50 reflects an expansion in the sector.
The February ’26 data for the Canadian manufacturing sector recorded a positive month, with new orders returning to growth. This is despite a backdrop of softening export sales, as well as ongoing challenges arising from US tariffs. This was shared in a statement by the economics director at S&P Global Market Intelligence, Paul Smith.
The new orders index surged to 50.6 from 49.3 a month before in January ’26. It marks the first month of growth since January ’25. This was whilst the measure of new export reflected 46.6, an increase from the previous 44.6.
Meanwhile, US tariffs on critical sectors, such as automobiles, steel, and aluminium, have had a significant dent in Canadian exports.
Smith added that greater workloads and signs of a turnaround in domestic demand may also have contributed to the fastest rise in employment. This spans a period of 13 months with a marginal rebound in purchasing activity.
Meanwhile, the employment index recorded a marginal increase to 51.0, up from a previous level of 50.6 in January ’26. This was driven by improved order books and long-term expansion plans. A measure of firms’ optimism surged to the highest level in nearly 15 months back in December ’24.
The input price index edged up to 59.1 from a previous 59.0 in January ’26. This also marks the highest level since August ’25. Firms attribute it to rising metal prices, besides higher imported raw material costs.
A measure of factory gate prices also surged. It touched its highest level since March ’25.
