Canada Private Sector Activity Back to Contraction

The S&P Global Canada Composite PMI recorded 46.4 in January 2026, down from 46.7 in December and remaining below the 50.0 no-change mark for a third straight month. Manufacturing stabilised in January, while services fell to 45.8 from 46.5, with the latter the main driver of the downturn. New business volumes declined for a fourteenth consecutive month and continued to weigh on output. Backlogs of work decreased markedly again as firms were easily able to keep on top of workloads. Employment contracted for a fifth successive month, albeit modestly, as firms pared staff or chose not to replace leavers. Business confidence softened since December and remained well below trend. On the price front input cost inflation softened to its softest rise since November 2024, while output charge inflation remained solid and little-changed compared with December.

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.