The S&P Global Canada Manufacturing PMI rose to 46.1 in July of 2025 from 45.6 in the previous month, but continued to reflect a contraction in the Canadian private-sector factory activity. It was the sixth consecutive month of decline in manufacturing, pressured by the series of tariffs slapped by the United States on Canadian goods and domestic retaliatory levies. Marked contractions took place both for new orders and output, albeit at a slightly softer pace than those observed in June, amid lower demand from Canada's largest trading partner. The demand for capacity drove firms to reduce staffing levels for the sixth straight month, accelerating the magnitude of decline. Still, input inflation softened to the lowest degree since November 2024 to ease below its long-term average. Similarly, output charges rose the least since February. Looking ahead, firms continued to cite uncertain outlooks due to volatile policy changes.