Canada's S&P Global Services PMI declined from 50.6 in May to 47.1 in June 2026, indicating a renewed contraction in the services sector and marking the sharpest drop in activity since February. Business activity weakened as new orders fell for a second consecutive month, with firms reporting that high prices and geopolitical uncertainty continued to weigh on both domestic and external demand.
Despite softer demand, employment edged up as companies took on additional staff to expand capacity, which in turn supported the fastest reduction in backlogs of work since January. On the cost side, input price inflation eased markedly from May’s four-year high, though it remained elevated, driven by increased energy, fuel, and wage expenses. Output charge inflation also cooled to a three-month low as weaker demand constrained firms’ pricing power. Business sentiment deteriorated for a second straight month, slipping to its lowest level since November 2025.
