By Fergal Smith
TORONTO, July 2 (Reuters) - Canada's manufacturing sector expanded further in June as production and employment rose, but not all was positive for the sector as intensifying supply shortages helped lift cost inflation to a near four-year high.
The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI) edged up to 53.0 last month from 52.9 in May. It marked the sixth straight month that the index was at or above the 50 threshold. A reading above 50 indicates expansion in the sector.
“Canada’s manufacturing economy on the surface enjoyed a positive June, with output and new orders rising at solid rates and supporting an uplift in employment for a third successive month," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.
The output index rose to 52.1 from 52.0 in May and the measure of employment was at 51.9, its highest level since October 2024, as firms added staff to cope with increased workloads.
"Digging deeper below the surface reveals the continuation of some worrying trends, with growth still partly driven by stockpiling as firms and their clients continue to face substantial supply-side disruption," Smith said.
Suppliers' delivery times lengthened to the greatest degree since September 2022 as the war in the Middle East disrupted shipping routes.
High oil prices and increased transportation costs as well as U.S. tariffs contributed to increased input costs. The input price index rose to 67.2 from 66.5 in May, posting its highest level since July 2022, while a measure of business confidence slipped to a three-month low.
(Reporting by Fergal Smith; Editing by Chizu Nomiyama )
