Dec. 1, 2025, Canada — Canada’s manufacturing economy experienced a modest contraction in operating conditions during November amid quicker contractions in both output and new orders, S&P Global reported in the November Canada Manufacturing Purchasing Managers’ Index (PMI).“Canada’s manufacturing sector remained in the doldrums during November, experiencing concurrent – and accelerated – drops in output and new orders,” said Paul Smith, economics director at S&P Global Market Intelligence, in a media release. “Market uncertainty, again linked to tariffs especially in relation to international trade, was again noted by panellists as leading to subdued performance.“Firms were subsequently keen to utilise existing capacity to deal with current workloads and generally refrained from purchasing inputs or replacing any leavers at their plants. Workforce numbers subsequently fell further,” Smith said.The PMI came in at 48.4 in November, down from 49.6 in October and below the critical 50.0 no change mark, where it has remained throughout much of 2025.Similar trends were observed for both production and new orders. Firms continued to note a general air of uncertainty in product markets, which resulted in subdued demand and modest contractions in both output and new work.This was again especially the case for new export trade, which fell for a tenth successive month in November. Tariffs remained a factor weighing on international demand.The general lack of demand and falling production requirements tended to discourage firms from hiring additional workers in November. On the contrary, firms typically chose not to replace any leavers, with the net impact being a modest overall fall in staffing levels. It was the tenth successive month in which employment has overall declined.Firms nonetheless had sufficient capacity to deal with overall workloads at their plants as evidenced by another steep and accelerated decline in backlogs of work. The rate of contraction was the sharpest since July.Confidence in the outlook meanwhile remained positive amid some hopes amongst firms that new product launches will help them to secure new clients. But confidence overall remained historically subdued as some uncertainty in the outlook persisted, especially in relation to tariffs.“There is some hope that the worst is behind the sector. The contraction in November was relatively shallow (despite accelerating since October), whilst the impact of tariffs on prices is fading with input price inflation dropping to its lowest level in over a year. With selling charges also rising at a below-trend pace, inflationary pressures appear increasingly well contained heading into the end of 2025,” Smith said. (ICE TORONTO)

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