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RPT-Canadian factory activity hits 9-year low as coronavirus hurts global economy

Published 04/01/2020, 09:31 PM
Updated 04/01/2020, 09:40 PM

TORONTO, April 1 (Reuters) - Canadian manufacturing activity
tumbled in March to its weakest in at least nine years, data
showed on Tuesday, providing some of the clearest evidence yet
of the domestic economic damage from the spreading coronavirus
pandemic.
The IHS Markit Canada Manufacturing Purchasing Managers'
index (PMI), a measure of manufacturing business conditions,
fell to a seasonally adjusted 46.1 in March, the lowest in data
going back to October 2010, from 51.8 in February. A reading
below 50 shows contraction in the sector.
The weak data came as the coronavirus outbreak interrupted
economic activity globally and a price war between major oil
producers triggered a collapse in the price of oil, one of
Canada's major exports.
"Shrinking customer demand was almost exclusively attributed
to production stoppages at home and abroad amid emergency public
health measures to halt the COVID-19 pandemic," said Tim Moore,
economics director at IHS Markit.
"Some manufacturing companies cited an additional fall in
new business related to a sharp drop in spending by clients in
the energy sector," Moore said.
The output index plunged to 41.2 from 51.5 in February,
while the measure of new orders was down sharply to 41.0 from
51.7, the data showed.
Ottawa is providing about C$95 billion in support for
Canada's economy, including wage subsidies, loan programs and
tax deferrals, while the Bank of Canada has slashed interest
rates to nearly zero in a series of emergency moves this month
and plans to buy government debt.

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