Canada's manufacturing sector expanded for a fifth consecutive month in August, with output and employment increasing despite growing trade tensions with the United States. The S&P Global Canada Manufacturing Purchasing Managers' Index (PMI), a survey-based measure of factory activity, slipped to 53.0 from 53.5 in July but remained above the 50 threshold that separates expansion from contraction. Output rose to 52.8 from 52.6, while employment reached 52.0, its highest level since October 2024. S&P Global Market Intelligence economics director Paul Smith said the survey showed solid gains in output and new sales, supporting hiring and improving business optimism. He cautioned that much of the survey was completed before trade negotiations with the United States collapsed, potentially making August a high point for growth. The United States imposed new 50% tariffs on $20 billion of Canadian imports on Aug. 22 after the talks broke down. New export orders rose slightly to 48.2 but stayed below 50 for a third month, indicating continued contraction in foreign demand. Input cost inflation eased to a four-month low but remained historically elevated, with companies citing U.S. tariffs, global supply shortages, and higher fuel and metals prices. S&P Global said tariffs and the adverse impact of the U.S.-Israeli war with Iran on shipping routes significantly extended input-delivery times. Despite those pressures, the future output index climbed to 58.7, its highest level since December 2024.