Canada's services PMI hits six-month low as trade tensions grow

By Fergal Smith

TORONTO, Sept ‌3 (Reuters) - Canada's services ​economy ​contracted at its steepest pace in six months in August as rising trade tensions and geopolitical instability weighed on new business, ‌S&P Global's Canada services PMI data showed on Thursday.

The headline Business ⁠Activity Index fell to 46.8 last month from 49.1 in July, marking its lowest ‌level since February. A reading ‌below 50 indicates contraction in the sector.

• “Against the backdrop of escalating trade tensions with the U.S. and the ongoing conflict in the Middle East, ​the underlying health of Canada’s service sector continued to suffer in August," Paul Smith, economics director at S&P Global Market Intelligence, said in ⁠a statement.

• "Activity and new business volumes fell again, and to greater degrees as ongoing uncertainty meant clients ​remained reluctant to commit to new contracts."

• The new business measure was at 46.1, its lowest level since January and ​down from 48.4 in July.

• The U.S. ‌imposed new 50% tariffs on $20 billion of Canadian imports on August 22 after talks between the two countries collapsed.

• "Confidence about ⁠the future was at its lowest level in over a year, with rising prices also seen as a threat to future business performance," Smith said.

• The future ⁠activity index declined to 56.4 from 57.5, posting its lowest level since June 2025, while ​rising energy prices helped underpin input prices. The input price measure remained elevated and above trend even as it dipped from July, S&P Global said.

• The S&P Global ‌Canada Composite Purchasing Managers' Index fell to 47.8 last month, its lowest level since March, from 49.7 in July, ‌driven by weakness in the service sector.

• Data on Tuesday showed that the ⁠S&P Global Canada Manufacturing Purchasing Managers' ‌Index (PMI) edged down to ​53.0 in August from 53.5 in July but was indicating expansion for a fifth straight month.

(Reporting by Fergal Smith; Editing by ‌Paul Simao)

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