Canada’s manufacturing pulse slows slightly in November

Canada’s manufacturing sector entered November with another month of contraction as the national PMI slipped to 48.4 from 49.6 in October, according to S&P Global. The headline figure has now spent a long stretch below the 50 threshold that separates expansion from contraction, and the latest decline reflects a mix of weaker output, softer new orders, and a continued pullback in hiring across many industrial hubs, although it remains close to the expansion zone.

The story behind the index is familiar yet increasingly pressing. Firms across the country reported that demand remained subdued. New orders retreated again as both domestic and international customers delayed spending decisions. Export demand continued to soften which is consistent with the slower US momentum seen through the fall. Producers also scaled back output to prevent inventories from rising too quickly. Input costs continued to rise at a moderate pace while selling prices remained under pressure. The margin squeeze has been one of the clearest signals of hesitancy around staff additions.

Employment indicators in the PMI survey pointed to slight contraction as manufacturers continued to manage labour through attrition and selective vacancy freezes. Many firms described a need to keep teams lean until clearer signals of a demand recovery emerge. The reduction was not sharp which suggests that companies are still trying to preserve core skills but it reflects a cautious outlook for early 2026.

There were elements that point to eventual stabilisation. Supplier performance continued to improve, delivery times shortened, and inventory management appeared more disciplined than earlier this year. These trends often precede a turning point since firms with tighter operational control can ramp production more quickly once orders return. The mild easing of input cost inflation also gives producers breathing room during a period of thin margins.

For the labour market the implications are mixed; the downturn in new orders suggests that hiring conditions for production roles will remain soft through the winter in regions with heavy industrial concentrations such as southern Ontario and parts of Quebec. Temporary placements are likely to hold up slightly better than permanent hiring as firms look for flexibility. Skilled maintenance, quality control, and automation related roles continue to show pockets of resilience which lines up with broader shifts toward capital investment and plant modernisation.

Staffing firms should watch early signs of stabilisation in export related categories as the manufacturing cycle often turns before the broader economy. Any improvement in US demand could quickly filter into Ontario based supply chains. There is also a near term lift that could come from defence and aerospace procurement as new federal initiatives move from announcement to early contracting stages. While these projects do not immediately impact the PMI, they can support sentiment and hiring intentions.

For now the November reading reinforces a picture of a sector that is not in free fall but is still searching for a floor. Producers are protecting balance sheets and preserving essential skills while waiting for a sustained rebound in orders. The winter months will remain challenging although the groundwork for stabilisation is slowly taking shape.