• Canada Manufacturing PMI fell slightly to 56.2 in January, remaining in robust territory. 
• The loonie did not react to the broadly in line with expected data. 

Canadian Manufacturing PMI fell to 56.2 in January, indicating continued robust growth in the manufacturing sector. That marked a slight drop from December's 56.5 reading and was a little below expectations for 56.9. 

IHS Markit Economic Commentary:

• "Another robust improvement in operating conditions was recorded in Canada's manufacturing sector with the PMI at 56.2 at the start of the year. The headline figure reflected favourable demand conditions, rising employment levels and growth in inventories.
• "Additionally, price pressures showed further signs of easing, with rates of output and input price inflation moderating to ten- and 11-months lows, respectively.
• "That said, COVID-19 yet again hit performance with output growth slowing notably. Tighter restrictions, among other issues, led to weak input availability and poor transportation conditions.
• "Nevertheless, there is a further indication that restrictions will start to ease across the provinces in the months ahead. Fortunately, Canada boasts a high vaccination rate, which has allowed for growth to continue in the manufacturing sector despite a resurgence in cases.”

Market Reaction

The loonie does not appear to have reacted to the latest broadly in line with expected PMI results.