TORONTO (Reuters) - Canadian manufacturing activity expanded in February at the fastest pace in three months as an easing of domestic restrictions to contain the coronavirus pandemic supported a pick-up in production, data showed on Tuesday.
The IHS Markit Canada Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 56.6 in February from 56.2 in January, posting its highest level since November last year. A reading above 50 shows growth in the sector.
"Growth was underpinned by a quicker expansion in output, following sharp uplifts to headcounts and supportive domestic demand conditions," Shreeya Patel, an economist at IHS Markit, said in a statement.
Demand climbed following a further relaxation of COVID-19 restrictions, IHS Markit said. Some Canadian provincial governments dialed back restrictions last month that were put in place to slow the spread of the Omicron variant.
The output index rose to 53.2 from 51.5 in January, while the measure of employment was at 54.6, up from 53.2. Still, material scarcity remained a headwind, causing lead times to lengthen.
The suppliers' delivery times index was at the fifth-lowest in the 11-year history of the survey, while measures of input and output prices edged higher.
"For now, businesses in Canada are coping with external pressures, but issues surrounding rising costs and supply are likely to persist for the duration of the year," Patel said.