Manufacturing PMI

The S&P Global Canada Manufacturing PMI is a monthly factory survey compiled by S&P Global. It polls purchasing managers in a panel of around 400 manufacturers. The panel is stratified by detailed sector and workforce size based on contributions to gross domestic product (GDP). Each reply gives only direction of change from the previous month.

Results become diffusion indexes: breadth scores from 0 to 100 based on the shares of higher and unchanged replies. Above 50 means broad increase; below 50 means broad decrease. It does not measure output volume, GDP, or services, and it differs from the Ivey index, a separate Canadian survey. Collection began in October 2010 within a programme covering over 40 countries.

Responses are usually collected in the 2nd half of each reference month, for example April 12-24, 2023. The release usually comes on the 1st business day of the next month at 09:30 Eastern. That is America/Toronto time, under embargo. The calendar date shifts with weekends and public holidays.

Each release publishes a news PDF with key findings, history charts, and an economist comment. It details output, orders, employment, prices, lead times, purchasing, stocks, backlogs, confidence, and the methodology box. Underlying replies are never revised after publication. Seasonal adjustment factors, or corrections for normal calendar patterns, may be revised and shift past adjusted values.

The Headline PMI blends five survey parts weighted by importance.

• New Orders, 30%: inflow of new work and demand, the headline's largest driver.

• Output, 25%: direction of factory production.

• Employment, 20%: direction of staffing and headcount.

• Suppliers' Delivery Times, 15%: vendor lead times, inverted in math so the gauge moves with the rest.

• Stocks of Purchases, 10%: input inventory levels held.

The May 1, 2023 release (April 2023 data) showed a 50.2 headline, up from 48.6, a marginal gain past 50. Output and hiring rose, yet new orders fell for a second straight month and exports kept shrinking for nearly a year.

Hiring grew at its fastest pace since June 2022 while backlogs fell for a ninth straight month. Purchasing activity and input stocks fell for a ninth straight month, while lead times worsened only slightly. Input inflation hit that year's strongest pace while output charges, or selling prices, grew at their weakest pace in nearly three years.

1. Diffusion index: for each topic, score replies as the share of higher plus half the share of unchanged; lower adds 0. Example: 20% higher plus 60% unchanged gives 20 plus 30, or 50.0.

1. Scale: each index runs from 0 to 100. Above 50 means broad gain from the prior month; below 50 means broad loss.

1. Seasonal adjustment: each part is adjusted for normal seasonal patterns before blending. This removes calendar effects so months compare fairly.

1. Inversion: the delivery-times gauge is flipped in math so it moves with the rest. Read its headline share inverted, not raw.

1. Weighted blend: headline is a weighted mean: 0.30 New Orders, 0.25 Output, 0.20 Employment, 0.15 inverted delivery times, 0.10 input stocks. Example: 52.0, 51.0, 49.0, 48.0, and 50.0 give 15.60 plus 12.75 plus 9.80 plus 7.20 plus 5.00, or 50.35, about 50.4.