March data signalled a robust and accelerated improvement in business conditions across the Canadian manufacturing sector, driven by faster rises in production, new orders and employment. Survey respondents widely commented on a boost from stronger domestic demand in March, especially among energy sector clients. Manufacturers also reported positive sentiment regarding the year-ahead outlook, which underpinned the greatest rise in payroll numbers since June 2012.

Meanwhile, cost pressures intensified in March. Efforts to alleviate pressures on margins meant that factory gate prices were raised at the steepest pace for exactly three years. The seasonally adjusted Markit Canada Manufacturing Purchasing Managers' Index™ (PMI™) rose from 54.7 in February to 55.5 in March, to remain above the crucial 50.0 no-change value for the thirteenth consecutive month. Moreover, the latest reading signalled the fastest improvement in manufacturing business conditions since October 2013.