TORONTO: Canadian manufacturing activity moved closer in March to ending a lengthy period of contraction as employment rose alongside a slower downturn in new orders, data showed on Monday.

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 49.8 in March from 49.7 in February, posting its highest level since April.

A reading below 50 indicates contraction in the sector.

The PMI has been below that threshold since May, which is the longest such stretch in data going back to October 2010.

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“Canada’s manufacturing economy crawled closer to stabilisation in March, with output and new orders recording only marginal falls,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.

The new orders index rose to 49.4 from 48.7 in February and the employment measure held steady at 50.7.

“Firms continued to report that market demand remained subdued, with clients hesitant to commit to new work,” Smith said.

“Manufacturers subsequently remain focused on destocking as they seek to better align their production and inventory requirements.”

The stocks of finished goods component dropped to 47.6, its lowest level since September, while inflation measures were mixed.

The input prices index edged up to a four-month high of 54.2, due in part to supply chain delays.

The measure of output prices was at 51.3, its lowest since June.