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Update: S&P Global Says Canada's July Manufacturing PMI Rises to Highest Level in More Than Four Years

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(Update with economist's comment in the third and sixth paragraphs.)

Canada's manufacturing sector saw its greatest improvement in over four years in July thanks to output and orders, according to S&P Global on Tuesday.

The seasonally adjusted Canada Manufacturing PMI rose to 53.5 in July from 53.0 in June, reaching its highest level since June 2022 and signaling a fourth consecutive month of expansion, wrote S&P Global in a note. A reading above 50 indicates growth for the sector.

"PMI data for July painted a positive picture of current growth," wrote Paul Smith, economics director at S&P Global Market Intelligence, in the note.

The improvement reflected faster growth in output and new orders, supported by stronger domestic demand. However, export orders fell for a second consecutive month amid tariff pressures from the United States and geopolitical uncertainty, said S&P Global.

Rising prices and geopolitical uncertainty pushed business confidence to a four-month low in July, despite stronger sales and production, it added.

"However, whether growth can be sustained at its current clip is doubtful," said Smith.

Meanwhile, employment rose for a fourth consecutive month as firms increased hiring to support higher output, according to S&P Global.

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