FX.co ★ Canada Services PMI Contracts Amid Market Uncertainty

In June 2025, the S&P Global Canada Services PMI dropped to 44.3, down from 45.6 in May, indicating an accelerated decline in the services sector. This marks the seventh straight month of contraction as both activity and new business continued to diminish against a backdrop of widespread market uncertainty—particularly concerning US trade policies and tariffs. Despite this, employment in the sector saw modest growth for the second consecutive month, marking the most robust performance since November of the previous year. On the pricing side, input price inflation surged to its highest level since October 2022, influenced by tariffs, increased supplier costs, and rising labor expenses. Consequently, service providers raised their selling prices to a peak not seen since May 2024. Business confidence, however, reached a three-month low, as anticipation over US trade policies continued to restrain optimism. Additional factors affecting confidence included the recent change in the Canadian government and overarching economic instability.