TORONTO, (Reuters) – Canadian manufacturing activity grew by a modest pace in September compared to the previous month’s strong level. However, global supply shocks helped lift inflation levels to records highs, data from Friday showed.

IHS Markit Canada’s Manufacturing Purchasing Managers’ Index (PMI), fell to 57.0 in September, from 57.2 in August. However, it is not too far away March’s record setting pace of 58.5.

The PMI reached the threshold of 50 for the fifteenth consecutive month, marking sector growth.

Shreeya Ptel, economist at IHS Markit said that Canada’s manufacturing sector saw another improvement in its operating conditions, despite rising infection rates in key provinces.

Canada is still fighting a fourth coronavirus infection driven by the Delta, and global pandemic restrictions are contributing to bottlenecks.

Patel stated that material scarcity caused higher shipping costs, delays in shipment, and subsequent increase in the number of incomplete works. According to anecdotal evidence, firms sought out ways to reduce their backlogs. However, a shortage of skilled workers impeded productivity.

The series record for outstanding business was 56.6, compared to 55.6 in August. Meanwhile, the output price and input price indexes reached their highest level ever.

However, companies remain positive about the prospects of growth with future output index reaching its highest level since May 2019 – a sign that they are optimistic.