TORONTO, Jan 4 (Reuters) - Canadian manufacturing activity expanded at the slowest pace in five months in December as material shortages and delivery delays held back output, data showed on Tuesday.
The IHS Markit Canada Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 56.5 in December from 57.2 in November. A reading above 50 shows growth in the sector but the latest reading was the lowest since July.
"Whilst on the whole latest data are positive, it is difficult to ignore the impacts of the pandemic on the sector," Shreeya Patel, an economist at IHS Markit, said in a statement.
"Over the last year or so, material shortages have been prominent, and whilst production has continued to expand, the latest uptick was the softest for ten months."
The output index fell to its lowest level since February at 53.3 from 54.1 in November, while a separate index showed incomplete work rising.
With lead times lengthening, manufacturers added to their inventories at the quickest pace in the 11-year history of the survey.
The fast-spreading Omicron coronavirus variant could further challenge the sector.
"News of the Omicron variant paired with sustained supply shortages has been a cause for concern among some Canadian manufacturers," Patel said. (Reporting by Fergal Smith Editing by Chizu Nomiyama)
