TORONTO (CU)_Over the recent weeks many provinces across Canada began easing restrictions following a hard third wave of COVID-19. However, many firms have been reporting material shortages, while also finding it difficult to source skilled workers on account of the pandemic. On the other hand, the health crisis has stretched global supply chains as some of the major economies beginning to reopen.
As a result, factory activity in the North American nation grew at the slowest pace in four months. According to IHS Markit, Canada’s Manufacturing Purchasing Managers’ Index in the month of June dipped to 56.5, from 57.0 in the previous month. Although this was the lowest reading since February, the fact that it remained above the 50 threshold signalled growth in the manufacturing industry.
According to Shreeya Patel, an economist at IHS Markit, the data “continued to highlight a robust expansion”. “A record uptick in pre-production inventory holdings suggests firms are gearing up for another busy quarter while a rise in backlogs could see job creation continue,” she added.
Meanwhile, pre-production inventories in June rose to 54.4, the highest level since October 2010. In the month of May, this figure stood at 52.3.
Despite slow growth in factory activity, the data from Canada suggest a noteworthy recovery from the global health crisis, in stark contrast to fellow Commonwealth member India, whose Manufacturing Purchasing Managers’ Index reached an 11-month low of 48.1 in June. According to experts, this steep fall in factory activity is a result of the decline in demand on account of the strong increase in energy and commodity prices, which led to a six-month high inflation rate.
