Canada April S&P Global services PMI 41.5 vs 41.2 prior

In March this index fell to 41.2 from 46.6, which was the lowest reading since June 2020. It bounced slightly here but that’s hardly reassuring.

• Composite index 41.7 vs 42.0
• Job losses were recorded for
  a fourth successive month
• A lack of present incoming new work meant firms were
  generally willing to let employees leave without replacing
  them
• Firms chose on average to reduce
  their selling prices for the first time in nearly four years
• Panellists reported that sales volumes had continued to
  deteriorate
• Backlogs of work were nonetheless reduced
  markedly again as capacity remained more than sufficient to
  deal with current workloads

This sure sounds like a recession and that the BOC needs to get ahead of the curve. This report doesn’t get a great deal of attention in the market but maybe it should.

Paul Smith, Economics Director at S&P Global Market
Intelligence, said:

“Canada’s service sector economy faced another
challenging month, with activity declining steeply and
new business volumes again down sharply. Firms again
linked these weak trends to widespread economic and
political uncertainty, in turn linked to trade policies
and, at the time of survey data collection, the general
election.

“Service providers are hopeful that a more stable
business environment will have emerged in a year’s
time, but presently, given the lack of new work and
excess capacity at units, job losses were again reported.
Moreover, adding to the woes of service providers,
firms felt compelled to reduce their output charges for
the first time in over four years – despite input price
inflation remaining elevated as suppliers were again
reported to be reevaluating their list prices.”

This article was written by Adam Button at www.forexlive.com.