PMI

What is PMI?

The S&P Global Canada Manufacturing PMI (Purchasing Managers' Index) is a monthly survey of buying managers. S&P Global publishes it through S&P Global Market Intelligence, and data collection began in October 2010. It covers manufacturing only, not services or the whole economy. It is not the Ivey index and not the US ISM.

Each month questionnaires go to a panel of around 400 manufacturers, stratified by detailed sector and workforce size on GDP shares. Each manager reports whether conditions rose, held steady, or fell versus the previous month. Answers form diffusion indices from 0 to 100, where 50 marks no overall change.

When is it released and what happens each release?

Survey responses are collected in the second half of each month. The release appears at 09:30 Eastern Time on the first business day after the reference month. That is 13:30 UTC, or 14:30 UTC in winter under Eastern Standard Time. Each release carries its own embargo line, with a French edition at the same time.

Each release gives key-findings bullets and headline PMI history back to 2011, charted seasonally adjusted with above 50 as growth since the previous month. It also shows the PMI Output Index against manufacturing-production growth from StatCan data, plus sub-index readings, economist commentary, a methodology box, and press contacts.

Underlying survey replies are not revised after publication, but seasonal factors may be revised and shift the adjusted series. Read each result against 50, where above 50 means growth, below 50 means contraction, and distance from 50 shows strength.

What moves PMI?

Headline PMI blends five fixed-weight signals, and each part can pull it either way.

• New Orders, 30%: captures incoming demand from order books.
• Output, 25%: captures factory production volumes.
• Employment, 20%: captures staffing levels and hiring.
• Suppliers' Delivery Times, 15%: captures average lead times, inverted so longer delays rise with expansion.
• Stocks of Purchases, 10%: captures direction of input inventories.

Outside the headline, releases also cover new export orders, backlogs, input prices, output charges, and future output confidence.

The October 2023 release was embargoed November 1, 2023, with answers collected October 12 to 25, 2023. It put the headline at 48.6, up from 47.5, a three-month high but a sixth straight month below 50. The gain reflected softer contractions in output and new orders, yet production still fell at a marked pace.

Outlook confidence slipped to its lowest in nearly three and a half years, weakest since May 2020. Input price inflation jumped as demand faded, pressuring firms with dwindling orders. Economics Director Paul Smith commented on prices.

The prior September 2023 release, embargoed October 2, 2023, fell to 47.5 from 48.0, a fifth straight deterioration and the lowest since May 2020.

How is PMI calculated?

1. Diffusion: for each variable, add the share reporting higher to half the share reporting no change.
2. Seasonal adjustment: adjust each index for seasonal effects.
3. Inversion: reverse the Suppliers' Delivery Times index so it moves with the others.
4. Headline average: combine as 0.30 New Orders plus 0.25 Output plus 0.20 Employment plus 0.15 inverted delivery times plus 0.10 stocks.
5. Reading: above 50 means overall increase versus the previous month, and below 50 means overall decrease.

For example, if New Orders has 20% higher, 54% unchanged, and 26% lower, the diffusion score is 20 plus half of 54, or 47.0. Take 47.0 for New Orders, 46.5 for Output, 49.0 for Employment, 52.0 for inverted delivery times, and 45.0 for stocks.

The weighted sum is 14.1 plus 11.625 plus 9.8 plus 7.8 plus 4.5, or 47.825, published as 47.8. That is below 50, so it signals overall deterioration versus the previous month.

Key point: A falling index does not mean contraction; only a reading below 50 does. A rise from 47.5 to 48.6 is still contraction at a slower pace, and only crossing 50 means growth. A PMI of 47.5 signals broad deterioration versus the prior month, not a 47.5% drop in output. It covers manufacturing breadth only, not services, not the Ivey index of about 175 cross-sector managers, and not the US ISM.