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Why Did Canada’s Manufacturing PMI Improve in October?

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Canada’s manufacturing PMI

According to the report by Markit Economics, Canada’s manufacturing PMI (purchasing managers’ index) stood at 51.1 in October 2016, as compared to 50.3 in September, and met the market estimate of 51.

Canada’s stronger growth in October indicated an improvement in the nation’s business activity. Specifically, the stronger performance of Canada’s manufacturing PMI is mainly due to the following:

  • New orders rose at a faster pace in October 2016 while production volumes remained stagnant.
  • Export orders rose at a slower rate in October. Domestic demand also showed weaker growth during the same month.
  • Manufacturers indicated an improvement in employment growth in October.
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Impact on the economy

In this slowing global (ACWI) (VTI) (VEU) environment, the weaker demand of Canada’s (EWC) economy is increasing the level of uncertainty in the economy. Also, the Canadian dollar (FXC) is getting stronger against the US dollar (UUP), and this currency strengthening is hampering the economy’s export growth.

In the next part, we’ll look at Japan’s (EWJ) Manufacturing PMI for October 2016.

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