Canada Ivey PMI Falls to 58.2 in September as Price Pressures Rise

Canadian economic activity moderated in September as the Ivey Purchasing Managers Index (PMI) slipped to 58.2 from 64.3 in August, according to data released by the Ivey Business School. Although the headline figure cooled, inflationary pressures within the supply chain intensified during the same period.

The Ivey PMI tracks month-to-month variation in economic activity through a survey of purchasing managers across Canada. Readings above 50 indicate that the economy is expanding, while readings below 50 signal a contraction. The September reading remains in expansionary territory, even with the decline from August, which had been the index's highest level since May 2022.

Inflationary Trends and Employment

While the overall pace of activity slowed, the prices index, which measures the costs faced by businesses, climbed to 82.8 in September. This is an increase from the 80.4 reported in August, suggesting that supply-side cost pressures remain elevated.

The labor market component of the survey showed signs of continued growth. The gauge of employment rose to an adjusted 56.5 in September, up from 55.0 in the previous month.

Understanding the Ivey PMI

The Ivey PMI is a watched indicator because it provides a timely look at business conditions before broader government data, such as GDP reports, are finalized. Purchasing managers are often the first to see shifts in order volumes, inventory levels, and input costs, so the index serves as a leading indicator for the health of the Canadian private sector.

By isolating variables like employment and input prices, the survey allows analysts to gauge whether economic growth is being driven by higher demand or if businesses are facing cost-push inflation. The divergence between the cooling headline index and the rising prices gauge highlights the challenge facing Canadian firms as they navigate higher operating costs despite a slight softening in overall business momentum.