Canadian manufacturing activity showed sustained output and new orders last month as the industry continued to expand, though data indicates recent growth may be driven by worries about prices and supplies.

The S&P Global Canada manufacturing purchasing managers index slipped to 52.9 in May. That marked a second successive month above the 50 threshold between expansion and contraction, after the index rose to 53.3 in April.

“Firms reported a general upturn in demand and success in securing new customers, despite ongoing anecdotal evidence that tariffs and the uncertainty caused by the war in Iran were weighing on product markets,” Paul Smith, economics director at S&P Global Market Intelligence, said.

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Still, Smith said the lift in performance on balance has likely been driven by customer efforts to secure goods due to concerns over price increases and product availability.

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The pace of growth in production and new orders for Canadian manufacturers softened but remained above trend levels, S&P Global said. Its poll found that some companies reported an improvement in demand and success in securing new customers, though generally from domestic sources as new export orders were little changed over the month.

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