Rise in Canada’s services PMI in April not encouraging for business

According to S&P Global, Canada's Services PMI remained below the critical 50-point level in April, at 41.5 points. The slight increase from 41.2 points in March did not alter the overall negative dynamics that have persisted for five consecutive months.

The main pressure on the services sector is coming from trade disagreements with the United States, which receives 75% of Canadian exports. Ongoing tariffs on steel, aluminum, and automobiles are negatively impacting the country's economic outlook. For the first time in four years, service companies are being forced to cut prices, which is leading to a deterioration in financial performance while costs remain high.

The situation is further complicated by continued job cuts in the sector. The new orders index, which reached only 41.9 points, indicates weak demand. Meanwhile, the industrial sector is also declining: the manufacturing PMI fell to 45.3, raising concerns about the state of the entire Canadian economy.