- Highest since June 2022
- New orders rise at fastest pace in over four years
- Output growth strongest since May 2022 as stockpiling drives demand
- Input cost inflation hits 3.5-year high on Middle East war, fuel and freight
- Output prices rise at fastest pace since late 2022 as firms pass through costs
- Vendor delivery times lengthen most in over a year, 22nd straight month of delays
Canada’s S&P Global Manufacturing PMI jumped to 53.3 in April from 50.0 in March, the highest reading since June 2022 and the third print above the 50.0 breakeven mark in the past four months. Output growth was the strongest since May 2022. New orders rose at the fastest clip in over four years. New export orders climbed at the quickest pace since the start of 2022. On paper, this is the kind of report Canadian manufacturing has been waiting on for the better part of three years.
Except it isn’t really. Or at least, not in the way a clean PMI beat normally suggests.
S&P Global’s Paul Smith essentially talked the report down in his own commentary, noting that growth “appears to be driven by worry rather than any meaningful or permanent uplift in demand.” Translation: clients are stockpiling ahead of the war in the Middle East rippling through supply chains and prices. That’s not real demand. That’s a pull-forward, and pull-forwards leave a hole on the other side.
The supporting data backs that read. Vendor delivery times lengthened for the 22nd consecutive month and at the steepest pace in over a year, with maritime routes flagged as the pinch point. Input buying surged at the fastest rate since June 2022 — but as panellists explicitly noted, the buying was about locking in stock before availability deteriorates and prices climb further. That’s defensive purchasing, not offensive expansion.
And the price story is where this gets uncomfortable for the Bank of Canada. Input cost inflation hit a three-and-a-half-year high, with fuel and freight doing the heavy lifting alongside ongoing tariff pressure. More importantly, manufacturers are passing it through — output charges rose at the fastest pace since late 2022. Smith flagged this directly, noting that central bank policymakers will be watching survey data closely to gauge how much inflation expectations are shifting.
Employment rose for the third time in four months but only marginally, with some firms choosing not to backfill departures. Future output expectations did improve to a 16-month high, but that optimism sits alongside explicit worries from respondents that rising prices, costs and tariffs will weigh on production going forward.
A 53.3 print built on stockpiling, lengthening delivery times and the fastest input cost inflation since 2022 is not the kind of growth signal that pulls forward BoC tightening expectations in any clean way — it’s stagflationary in character, not cyclically strong. The activity bounce will likely fade as the inventory build runs its course. The price pressures are the part that sticks.
Watch the May print. If new orders hold up once the stockpiling impulse exhausts itself, then maybe there’s something underneath
