S&P Global Canada PMI hits 51.0, marks 13-month high
March 2, 2026
By Jared Dodds
Talking Points
Canada’s manufacturing sector saw modest growth in February as S&P Global’s Manufacturing Purchasing Managers’ Index (PMI) rose to 51, its highest level in 13 months, up from 50.4 in January.
The increase was driven by a return to growth in new domestic orders and sustained employment gains, despite ongoing challenges from U.S. tariffs and a continued decline in export sales. Production volumes remained stable, with some manufacturers reporting higher workloads while others exercised caution due to inventory strategies and uncertain demand.
Rising metals costs, particularly for steel and aluminum, led to higher purchasing prices and the fastest increase in factory gate charges since March 2025. However, competitive pressures limited manufacturers’ ability to pass on these costs fully to customers.
- S&P Global’s Canada Manufacturing PMI reached 51 in February
- New domestic orders grew, but export sales continued to fall
- Manufacturers faced higher input costs and squeezed margins
This story matters as it signals cautious optimism for Canada’s manufacturing sector amid persistent trade headwinds and cost pressures, highlighting the sector’s resilience and the ongoing impact of U.S. tariffs on Canadian industry.
March 2, 2026, Canada — S&P Global’s Canada Manufacturing Purchasing Managers’ Index (PMI) hit a 13-month high in February, with the index reaching 51, up from 50.4 in January.
The rise comes as total new work increased for the first time since January and the upturn in employment was sustained from last month.
“February data indicated a positive month for the Canadian manufacturing sector as new orders returned to growth despite a backdrop of softening export sales and ongoing challenges arising from US tariffs,” said Tim Moore, economics director at S&P Global Market Intelligence, in a media release. “Production volumes have stabilized so far in 2026, following a sustained downturn last year. Greater workloads and signs of a turnaround in domestic demand also contributed to the fastest rise in employment for 13 months and a marginal rebound in purchasing activity.”
The renewed upturn in new business reflected improving domestic demand, which helped to offset a sustained decline in export sales. Latest data indicated a solid reduction in new work from abroad, although the rate of contraction eased to its least marked since October 2025. Survey respondents again widely commented on headwinds from U.S. tariffs.
Manufacturing output was unchanged in February, which continued the stable trend seen so far in 2026. While some firms noted a boost from rising workloads, others cited caution about their production requirements and the impact of tight inventory strategies. Stocks of finished goods have decreased for 12 months in a row, although the latest reduction was only marginal.
“Operating margins were squeezed during February amid another steep rise in purchasing prices. Many goods producers noted that suppliers had passed on rising metals costs, especially steel and aluminum,” Moore said in a press statement. “Factory gate charges consequently increased at the fastest pace since March 2025, although firms noted that competitive pressures had weighed on overall pricing power.”
Canadian manufacturers were upbeat about their overall prospects for output growth during the next 12 months. Around 24 per cent of the survey panel predicted an expansion, while only nine per cent foresaw a reduction. This translated to the highest overall level of optimism since December 2024.
However, confidence levels remained much weaker than the long-run survey average. Some firms noted hopes of a turnaround in customer demand, but there were also widespread concerns about U.S. tariffs and the prospect of continued trade frictions.