Canada’s services PMI shows sector shrinking for fourth straight month in September

Canada’s services economy contracted for a fourth straight month in September as tariffs and the war in the Middle East contributed to economic uncertainty, S&P Global’s Canada services PMI data showed on Monday.

The headline Business Activity Index rose to 48.3 last month from 46.8 in August but remained below the 50 mark. A sub-50 reading indicates contraction in the sector.

“September once again proved to be a difficult month for businesses, with net reductions in output and new work both signalled,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.

“These declines were again closely associated with tariffs and the war in Iran, which resulted in a high degree of uncertainty, lower levels of export trade and operating expenses being raised to an uncomfortably high degree.”

Uncertainty hangs over future of suspended Chinese tariffs on Canadian farm products, seafood

The United States and Canada have adopted rounds of countertariffs since early 2025, while a U.S. import ban on many Canadian alcoholic beverages, motorcycles and dairy products took effect last week.

With a reading of 48.5, the new business index was below the 50 threshold for a fifth consecutive month as new export business declined at a steeper rate than in August.

The input price index rose to 62.2 from 61.7 in August, reflecting the rise in cost pressures.

Still, hopes that uncertainty could ease helped lift sentiment, S&P Global said. The future activity index rose to 61.4 from 56.4 in August, notching a five-month high.

The S&P Global Canada Composite Purchasing Managers’ Index edged up to 48.7 in September from 47.8 in August but was stuck below the 50 no-change mark for a fourth month in a row.

Data on Thursday showed that the S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) fell to a six-month low of 51.5 last month from 53.0 in August.