Canada’s input price inflation reaches highest level since April last year
(MENAFN) In August, Canada saw a significant increase in input price inflation, reaching its highest level since April 2023, according to a report by S&P Global. This sharp rise in input costs was driven by higher prices for a range of inputs, notably plastics, along with unfavorable exchange rate movements and elevated shipping costs. These factors collectively contributed to a substantial increase in overall input price pressures.
Manufacturers in Canada responded to these rising costs by increasing their own charges to the greatest extent since November of the previous year. The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) remained below the crucial 50.0 neutral mark for the 16th consecutive month, indicating ongoing contraction in the manufacturing sector. However, the index improved slightly to 49.5 in August, up from 47.8 in July, suggesting a modest recovery.
Despite this slight improvement, Paul Smith, an economics director at S&P Global Market Intelligence, pointed out that the performance of Canada’s manufacturing sector continues to fall short of expectations. The slower declines in output and new orders in August compared to July offer a glimmer of hope for stabilization, but the sector is still grappling with a prolonged downturn.
Smith also expressed concern over persistent inflation and cost pressures, which have escalated to their highest levels in nearly a year and a half. The acceleration in output charge inflation and heightened cost pressures reflect ongoing challenges for manufacturers, who remain wary of the impact of these financial pressures on their operations and pricing strategies.
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