October data pointed to another challenging month for the Canadian manufacturing sector, with production volumes stagnating amid subdued demand patterns and ongoing efforts to reduce finished goods inventories. That said, the latest survey highlighted a slight improvement in overall business conditions, driven by a renewed rise in new work and greater employment numbers.

Meanwhile, operating margins were eroded further amid falling factory gate charges and a sharper increase in manufacturers' input costs. Adjusted for seasonal influences, the Markit Canada Manufacturing Purchasing Managers' Index registered 51.1 in October, up from September's seven-month low of 50.3. The index has posted above the 50.0 no-change threshold in each month since March, but the latest reading was weaker than the survey average (52.4) and signalled only a marginal improvement in overall business conditions.