Oct. 1, 2026, Canada — Despite modest, sustained growth in the month of September, the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) dipped, as confidence in the outlook drops. The index lowered to 51.5, remaining above the 50.0 no-change mark but down from 53.0 the previous month, registering its lowest reading since March. “Canada’s manufacturing economy showed a degree of resilience in the face of several headwinds during September. Output rose and firms showed a willingness to backfill vacancies with skilled workers to support recent long-term contract wins,” said Paul Smith, economics director at S&P Global Market Intelligence, in a media release. “However, tariffs and elevated global energy prices due to the war in Iran continued to have a damaging impact on the sector. Input cost inflation accelerated to its highest level since July 2022, whilst supplier delivery times lengthened to a degree not seen in over four years,” Smith said. Output continued to rise in September, but at the slowest rate in the past six months as new orders declined marginally for the first time since March. Panellists noted a degree of client hesitancy, largely due to tariffs, which were reported to have negatively impacted international demand. This was especially the case with clients based in the US as increased trade frictions led to a further drop off in demand and a decline in overall new export orders for a fourth month in a row. Customs delays and US border difficulties, plus the war in Iran and demand related to AI infrastructure build outs, were all reported to have added strain on already stretched supply chains. Vendors were again reported to be short of stock, whilst there were reports of container shipping delays on key maritime routes. Delivery delays were the most widespread since August 2022. This led firms to utilise their existing inventory wherever possible, placing some downward pressure on stocks of purchases which fell for the first time in six months. Firms also raised their own purchasing of inputs given shipping delays and a desire to boost stock availability at plants. Widespread product shortages and elevated fuel/energy prices – the latter linked in the main to the war in Iran – meant that input costs surged in September. Inflation overall was the highest recorded by the survey since mid-2022. Manufacturers responded by increasing their own charges. Whilst elevated, and well above trend, some firms reported that a weak demand environment had limited their pricing power. The various headwinds facing manufacturers in September weighed on sentiment. Confidence in the outlook dropped to its lowest level since December 2025, with tariffs and the difficulties of trading with the US the principal reasons behind the drop in confidence. Nonetheless, firms continued to add to their workforce numbers, with employment increasing overall for a sixth successive month. The rate of growth was modest, and the lowest since May, but several firms noted a desire to expand capacity to help service long-term contracts and fill shortages of skilled workers at their plants. A combination of increased workforce numbers and a drop in new orders meant firms could make inroads into their backlogs of work. Overall, work outstanding fell for the first time since March and to the greatest degree for eight months.