Canada Services PMI Remains in Contraction

Canada’s S&P Global Services PMI rose to 49.1 in July 2026 from 47.1 in June but remained below the 50.0 threshold, signaling a second consecutive, albeit milder, contraction in the services sector. Business conditions continued to be weighed down by tariffs and geopolitical tensions, which dampened both current activity and the outlook. Output and new orders declined again, though at a slower pace, while business confidence fell to its lowest level of 2026. Meanwhile, input cost inflation remained elevated, driven by tariffs, higher energy and fuel costs linked to the Middle East conflict, and rising labor expenses. Firms continued to raise selling prices despite weak demand, highlighting persistent inflationary pressures and risks to the broader economic outlook.





