By Fergal Smith
TORONTO, Oct 1 (Reuters) - Canada's manufacturing sector expanded at the slowest pace in six months in September as trade frictions and elevated energy prices weighed on activity, while confidence in the outlook dropped to the lowest level in nine months.
The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) fell to 51.5 last month from 53.0 in August, marking the lowest level since March. A reading above 50 indicates expansion in the sector.
• “Canada’s manufacturing
economy showed a degree of resilience in the face of several headwinds during September," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement. “However, tariffs and elevated global energy prices due to the war in Iran continued to have a damaging impact on the sector."
• A US import ban on many Canadian alcoholic beverages, motorcycles and dairy products took effect on Tuesday after talks involving President Donald Trump and Prime Minister Mark Carney broke down in August.
• The output index dipped to 50.8 from 52.8 in August, while the new orders measure slipped below the 50 threshold for the first time since March.
• “These issues didn’t just cause present difficulties, such as around stock and production management, but also added to a pervading uncertainty amongst clients and manufacturers alike especially given the seemingly intractable nature of trade tensions with the US and the ongoing conflict in the Middle East," Smith said.
• The future output index fell to its lowest level since December 2025 at 54.6, down from 58.7 in August, while delivery delays grew the most widespread since August 2022 and inflation pressures intensified.
• The measure of input costs rose to 71.1 from 66.4 in August, notching its highest level since July 2022.
(Reporting by Fergal Smith; Editing by Chizu Nomiyama )
