2026.01.0614:44:43UTC+00Canada Services PMI Improves but Stays in Contraction

The S&P Global Canada Services PMI increased to 46.5 in December 2025, a rise from 44.3 in November, although it continued to signal contraction. Excluding October's growth, the index remained beneath the neutral 50.0 mark throughout the entirety of 2025. Business activity experienced a decline, driven by a thirteenth consecutive month of reduced new work volumes, largely due to weak demand and customer hesitancy in committing to contracts. New export business similarly suffered, with yet another significant monthly decline. Under pressure from diminished activity and orders, service providers persisted in reducing employment by not replacing departing employees, continuing this trend for the fourth consecutive month. Despite the slowdown in demand, increased wage costs kept operating expenses high, leading firms to raise their selling prices for the eighth month in a row. While inflation did see an upward movement, it stayed below the levels observed earlier in 2025. Looking forward, firms remained optimistic about future activity, though their confidence was tempered and below historical averages, influenced by uncertainties surrounding tariffs and governmental policies.