October 1, 2018 / 1:48 PM / in 16 days

Canada manufacturing growth falters as global trade strife weighs

TORONTO (Reuters) - Canada’s manufacturing sector expanded in September at its slowest pace this year as the rise of production volumes decelerated and growth in new business was held back by global trade frictions, data showed on Monday.

FILE PHOTO: Production Associates inspect cars moving along assembly line at Honda manufacturing plant in Alliston, Ontario March 30, 2015. REUTERS/Fred Thornhill

The IHS Markit Canada Manufacturing Purchasing Managers’ index (PMI), a measure of manufacturing business conditions, fell to a seasonally adjusted 54.8 last month, its weakest since December 2017, from 56.8 in August. It was the third straight decline for the index, after it reached a survey-record high of 57.1 in June.

A reading above 50 shows growth in the sector.

“Canadian manufacturers reported a loss of momentum in September,” said Christian Buhagiar, president and CEO, Supply Chain Management Association (SCMA). “Survey respondents noted that global trade frictions had held back export sales and resulted in more cautious spending patterns among clients.”

The output index pulled back to a five-month low of 53.9, after climbing in August to its highest in nearly eight years at 57.2. Slower new business growth was seen by manufacturers as a drag on production, IHS Markit said.

The new orders index fell to its lowest since October 2017 at 53.8 from 55.7 in August amid evidence that global trade frictions had dampened export sales.

New export orders fell to 53.1, its weakest since March, from 54.7 in August. The data also revealed moderation in input cost and output charge inflation.

Input prices fell to 65.9 from 73.7 in August, which was the highest in more than seven years. Output prices declined to 58.9 from 61.3.

Reporting by Fergal Smith, Editing by Chizu Nomiyama

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