Canada Services Activity Falls Less in April

Canada’s S&P Global Services PMI Business Activity Index rose to 49.2 in April from 47.2 in March, but remained below the 50.0 threshold for a sixth straight month. The sector showed signs of stabilization, with activity declining only marginally and at the slowest pace in six months. Firms increased staffing levels for the first time since August 2025, while business confidence climbed to a one-and-a-half-year high. However, concerns over the Middle East conflict and tariffs persisted, with firms reporting higher operating costs. Selling prices rose at the fastest pace in two years, reflecting mounting cost pressures.

Canada's S&P Global Services PMI Business Activity Index rose to 47.2 in March from 46.5 in February — its best reading in five months — though still indicating a solid decline in activity. New business continued to decline, but the rate of contraction eased to the weakest in five months. The Middle East war directly impacted operating expenses, with input price inflation accelerating to a nine-month high. Firms responded by raising charges at a quicker pace than recent months. Wage costs increased despite average staffing reductions. Employment fell for the seventh consecutive month, though only modestly and at the weakest rate in the current downturn. Looking ahead, service providers signaled higher confidence in the outlook, with sentiment reaching its highest level in six months.

The S&P Global Canada Services PMI rose to 46.5 in February 2026 from 45.8 in January, signaling a slower pace of contraction in activity. New orders declined for the 15th consecutive month, though the rate of decline was the weakest since October 2025. With demand still weak, firms either chose not to replace departing workers or resorted to layoffs, pushing employment down for the sixth straight month. Input price inflation continued to ease, reaching its lowest level since September 2024, while output prices rose slightly faster, though still well below input cost levels. Business confidence edged up to its highest since October 2025, fueled by hopes that demand will improve, partly due to upcoming sporting events expected to boost tourism in Canada.