Canada's seasonally adjusted Ivey purchasing managers' index plunged to 49.9 in December from 63.6 in November. Analysts had expected the index to decline to 56.7.
A reading above 50 indicates a rise in the pace of activity, below 50 indicates a contraction in the pace of activity.
The supplier deliveries index was up to 54.2 in December from 53.4 in November, while employment index fell to 51.8 from 53.8.
The prices index was decreased to 54.8 in December from 55.2 in November, while inventories slid to 41.7 from 58.4.