Fergal Smith

TORONTO (Reuters), – Canadian manufacturing activity grew faster in May, as companies increased output to satisfy strong demand and inflation pressures showed signs of easing.

The S&P Global (NYSE:) Canada Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 56.8 in May from 56.2 in April. An increase in this sector is indicated by a reading of 50 or more.

“Canada’s manufacturing sector has recovered well from the pandemic, registering output growth in almost every month for the last two years,” Shreeya Patel, an economist at S&P Global, said in a statement.

The increase in client demand and easing pandemic restrictions aided the output index to rise to 55.6, from 54.8 in April. Meanwhile, the workforce grew at the fastest rate since December 2020. In addition, the survey-record index that measures the amount of input purchases reached a record high.

Patel stated that “Demand is still strong and firms are determined to grow their businesses through many different ventures… Companies have had difficulty keeping up with the demand though there has been severe labour shortages.”

While inflation pressures worldwide have increased this year, firms were less optimistic. But, the measures of output and input prices fell.