Canada Private Sector Activity Expands After a Year

The S&P Global Canada Composite PMI recorded 46.7 in December 2025, up from 44.9 in November but remaining below the 50.0 no-change mark for a second straight month. Manufacturing edged up to 48.6 in December from 48.4 in November while services rose to 46.5 from 44.3, with the latter still the main driver of the downturn. New business volumes declined for the thirteenth consecutive month and continued to weigh on output. Backlogs of work decreased but to a much lesser degree than in recent months as firms operated with spare capacity. Employment was cut for a fourth successive month, with the rate of job losses slightly weaker than in November as firms pared staff. Business confidence improved but remained well below trend. On the price front input cost inflation remained elevated and little changed since November while output charge inflation rose solidly but at a pace that stayed below trend.

The S&P Global Canada Composite PMI recorded 44.9 in November 2025, down from 50.3 in October and back below the 50.0 no-change mark and the lowest in five months. Manufacturing fell to 48.4 in November from 49.6 in October while services plunged to 44.3 from 50.5, with the latter driving the downturn. New business volumes declined for the twelfth consecutive month and continued to weigh on output. Backlogs of work decreased sharply and at rates not seen since June 2020 as firms operated with spare capacity. Employment was cut to the greatest degree since mid-2020 as firms pared staff. Business confidence fell to a five-month low and remained below trend. On the price front input cost inflation eased to a three-month low but stayed elevated while output charge inflation was only marginal and the smallest in seven months.

The S&P Global Canada Composite PMI recorded 50.3 in October 2025, up from 46.3 in September, marking the first rise in private sector activity since November 2024. Both the manufacturing (49.6 vs. 47.7) and services (50.5 vs. 46.3) sectors showed strong recoveries, with the latter returning to marginal growth while new orders continued to fall and weighed on output. Backlogs of work decreased sharply and at steep rates as firms comfortably handled both new and existing contracts. Employment fell modestly as firms cut staffing amid spare capacity and weak demand. Business confidence remained below trend and lower than in September. On the price front, input cost inflation remained elevated despite softening slightly from September’s three-month high, while output charge inflation strengthened as selling prices were raised solidly but were limited by competitive pressures.