Canada’s Booming Manufacturing Sector Prompts Need for Extra Support

welders on work

Canada’s manufacturing sector posted a record-high growth in June, which means that companies may need extra help to meet the higher demand for production.

For instance, it may be necessary to contract a welding company in Edmonton to handle an increase in new orders for the month. Based on the IHS Markit Canada Manufacturing Purchasing Managers’ Index, the industry recorded its highest growth since October 2010.

New Orders and Production

The index registered an overall reading of 57.1 in June. A score above 50 indicates expansion. Rising capacity and workload fueled the growth in production with a reading of 56.1, while new orders rose to its biggest rate at 57.7 in almost five years.

Part of the reason for the significant growth involved manufacturers’ desire to complete as many orders as possible, ahead of the proposed US tariffs on aluminum and steel, according to IHS Markit associate director Tim Moore.

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Mid-Term Outlook

Manufacturing companies seem to have a good reason for maximizing time before the US proceeds with its certain tariffs. By 2020, economists said that a recession awaits Canada if surcharges are imposed on export shipments of auto parts, cars, and light vehicles.

Ontario’s economy would be the most vulnerable to the auto tariffs. In the meantime, it may be best to focus on handling the growth of new manufacturing orders. Moore said that a general increase in customer demand partly diluted fears about the likely tariffs.

It remains to be whether or not the US would impose tariffs on imports from Canada. For now, manufacturing firms should think about how to address the need for additional capacity and meet the growing demand for production.