By Fergal Smith
TORONTO (Reuters) -The downturn in Canada’s manufacturing sector eased in October as output and new orders, which have been held back by trade uncertainty, declined at a slower pace, data showed on Monday.
The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to 49.6 last month from 47.7 in September, posting its highest level since January. A reading below 50 indicates contraction in the sector.
“October’s survey pointed to a relative improvement in the performance of Canada’s manufacturing sector,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “Although operating conditions continued to deteriorate, they did so only fractionally as both production and new orders moved towards stabilisation.”
The output index rose to 49.8 from 46.4 in September and the new orders measure was at 48.8, up from 46.1.
“Firms are hopeful that these positive signs will be built upon in the year ahead, with sentiment improving to a nine-month high,” Smith said.
The measure of future output climbed to 56.8 from 53.5 in September. Still, sentiment remained well below its long-term trend as tariffs and uncertainty over U.S. trade policy continued to weigh heavily on the outlook, S&P Global said.
On Friday, Canada’s Prime Minister Mark Carney said the world of rules-based liberalised trade and investment had passed as the global economy was going through one of the most profound changes since the fall of the Berlin Wall in 1989.
Tariffs continued to underpin input costs, with the input price index rising to 58.1 from 57.3 in September. Output charges also accelerated, but the rate of inflation remained below levels seen earlier in the year.
(Reporting by Fergal Smith; Editing by Paul Simao)
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