ISTANBUL

Canada's manufacturing sector contracted further in June, according to a report released by S&P Global on Tuesday.

The Manufacturing Purchasing Managers Index (PMI), which measures the activity level of purchasing managers in the manufacturing sector, fell to 48.8 in June.

The level is 0.2 percentage points lower than the 49.0 recorded in May, while the market expectation for the index was to come in at 49.6.

A reading above 50 indicates expansion, while below 50 shows contraction.

"Concurrent falls in output, new orders, and employment were all recorded," the report said, adding that Canadian manufacturers reported a marginal rise in warehouse inventories for a second month in a row.

"Reports of subdued market demand, both at home and abroad, were widespread, with clients reportedly hanging back from committing to new business given the uncertain economic outlook," Paul Smith, economics director at S&P Global Market Intelligence, wrote in the report.

He added that it will be difficult to get away from subdued industrial performance in the second half of the year due to a lack of market demand.