Rise in Canada's Composite and Services Purchasing Managers' Index in May
Fresh Take:
It's a bummer, huh? The thing is, Composite PMI and Services PMI both bumped up in Canada, but that's not saying much since they were still in the red zone. In May 2025, Composite PMI hit 45.50 points, up from April's 41.70, and Services PMI reached a not-so-great 45.60, compared to April's 41.50.
Here's the deal: Canada's service sector took another hit in May, but with a slight silver lining. The main cause was lingering fears about tariffs and a shaky overall economy. Business activity and new orders saw a significant drop, but the pace of decline wasn't as steep as before. That tariff-related uncertainty made service providers hesitant to jump into new projects. Oh, and did we mention price pressures? Yep, tariffs pushed inflation up for supply costs and had the highest output charges in a year. Yet, there was some marginal job growth, but the amount of work in the pipeline kept decreasing as demand dropped[1][3].
To sum it up:
- Tariffs and their impact on international trade created unease.
- Economic instability dented business confidence.
- Activity and new orders in the service sector dropped.
- Higher inflation for input prices and output prices was due to tariff-related cost pressures.
- Companies were cautious about taking on new projects due to uncertain economic conditions[1][3].
So, Canada's service sector has been in the dumps for six months now, but there's a glimmer of hope as some optimism about stabilization was reported[3]. Don't worry, we'll keep an eye on things for you!
Despite the ongoing unfavorable economic conditions and tariff concerns, companies within the Canadian finance industry have shown resilience, managing to secure some marginal job growth amidst the decline in the service sector. As the industry braces for the continued uncertainty, they are keeping a close watch on business activity, shifting their focus towards more stable ventures within the industry. To counteract the unfavorable market conditions, these businesses are strategically diversifying their financial portfolios, seeking opportunities in other industries that show promising growth potential.
