By Paul Vieira
OTTAWA--Canada's manufacturing sector maintained growth in June, with factory owners increasing their payrolls due to rising production and new orders.
The Canada-specific data released Thursday from S&P Global also carried warnings about inflation.
The S&P Global Canada manufacturing purchasing managers index edged upward to 53.0 in June, from 52.9. This marks the third straight month above the 50 threshold--which signals expansion among the country's manufacturers.
S&P Global attributed June's gain to solid increases in output and new orders. As a result, employment levels rose at their fastest pace since the fall of 2024, or before President Trump won a second term and introduced a shakeup in trade policy.
The positive result does come with caveats, said Paul Smith, economics director at S&P Global Market Intelligence.
"Digging deeper below the surface reveals the continuation of some worrying trends, with growth still partly driven by stockpiling as firms and their clients continuing to face substantial supply-side disruption," said Smith, in reference to shipping delays caused by the conflict between the U.S. and Iran.
The S&P Global report also indicated that input prices for factory owners rose at their steepest pace in nearly four years, fueled by higher energy and transportation costs. Several factory owners added that U.S. tariffs were also a notable driver of higher prices.
"Companies retained a degree of confidence that production will continue to rise over the year ahead," S&P Global said.
Write to Paul Vieira at paul.vieira@wsj.com