August 1, 2018 / 1:40 PM / 4 months ago

Canada manufacturing growth holds near survey-record high in July: Markit

FILE PHOTO: Buildings are seen in the financial district in Toronto, January 28, 2013. REUTERS/Mark Blinch

TORONTO (Reuters) - The pace of growth in Canada’s manufacturing sector eased in July but remained at a robust level, data showed on Wednesday, while U.S. trade tariffs contributed to lifting factory price inflation to its fastest since at least October 2010.

The IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, dipped to a seasonally adjusted 56.9 last month from a survey-record high of 57.1 in June.

The index, which shows expansion for the manufacturing sector when it is above 50, was held back in July by softer rates of new business growth and job creation, IHS Markit said.

The new orders index and the employment index both fell. But the output index rose to its highest since March 2017 at 56.4 from 56.1 in June.

Production volumes were boosted by robust order books and efforts to raise operating capacity, IHS Markit said.

“The manufacturing sector continued to perform strongly during July, with growth proving resilient against a backdrop of intense supply chain pressures and escalating concerns about global trade,” said Christian Buhagiar, President and CEO, Supply Chain Management Association (SCMA).

Surcharges on steel and aluminum products following U.S. trade tariffs were linked by manufacturers to the higher prices they charged, IHS Markit said. The output prices index climbed to its highest since the survey began in October 2010 at 62.8 from 59.6 in June.

A survey record was also seen for the lengthening of delivery times from suppliers due to strong demand for raw materials and transportation bottlenecks, IHS Markit said.

Reporting by Fergal Smith; Editing by Susan Thomas

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