- Prior was 48.2
- Panellists primarily linked ongoing weakness in activity volumes to a reduction in new business, which also fell for a second successive month in January
- Inflation softest in three months
Paul Smith, Economics Director at S&P Global Market Intelligence, said:
“Canada’s services economy experienced concurrent falls in both business activity and new work during January to signal another month of subdued sector performance. Panellists continued to note soft underlying market demand, with uncertainty weighing on business decisions. This may reflect ongoing unease over the impact of possible tariffs being applied on Canadian goods and services exported to the United States, and indeed this was cited as a real concern by service providers themselves. Whilst firms are looking to lower interest rates to help stimulate growth, tariff worries ensured that confidence amongst panellists remained well below trend.
“This uncertainty, plus general challenges in replacing expired contracts, helped to explain why service providers reported a marginal reduction in employment during January. Nonetheless, staffing expenses remained a source of broader input cost inflation for firms, which remained high in January.”
Expect continued turmoil in Canadian survey indicators as the ongoing tariff spat really touched a nerve.
