Canada Services PMI — Key Points
Steep downturn: November saw the sharpest decline in service-sector activity since June as demand weakened amid ongoing economic uncertainty.
PMI drops to 44.3: Down from 50.5 in October — the lowest since June and the 11th contraction in the past 12 months, signaling a steep contraction in activity.
Weak client demand: Decline driven by a lack of new work; clients are taking a “wait-and-see” approach due to uncertainty.
New business falls: 12th consecutive monthly decline in new business volumes and the steepest contraction since April.
Export orders weaken: New export orders fell at the fastest rate in seven months.
Confidence slips: Business sentiment dropped to a five-month low, remaining well below historical trends.
Employment cut: Staffing levels fell for the third straight month, with the sharpest decline since mid-2020, due to weak demand and cost pressures.
Excess capacity persists: Outstanding business levels declined sharply, showing spare capacity despite workforce reductions.
Input costs elevated: Wage increases and tariffs kept input price inflation high, though inflation eased to a three-month low.
Pricing power limited: Selling prices rose only marginally — the softest increase in seven months — as weak demand and competition limited firms’ ability to pass on costs; some resorted to discounting.
Margins remain pressured: Rising costs + limited ability to raise prices continue to squeeze profitability.
The USDCAD is bouncing. The low price once again tested the 50% midpoint of the move up from the mid September low to the high price reached in November. Recall that last Friday, the price also tested that midpoint level and found willing buyers.
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