- Services PMI drops to 46.4 from 47.8, signaling accelerating contraction
- New business falls at fastest clip since December 2020
- Employment declines sharply, most since July 2020
- Inflation pressures ease, but remain elevated
- Firms pin hopes on future rate cuts to boost growth
Paul Smith, Economics Director at S&P Global Market Intelligence, said:
"Canada’s service sector endured a challenging month in September, with activity and new business volumes declining markedly and job losses registered for a second month in a row. Moreover, rates of contraction accelerated as market conditions deteriorated since August. This subdued environment subsequently helped to explain why inflation rates eased to their lowest levels in the past three-and-a-half years.
"The combination of softening labour market conditions, slower inflation and declining output adds support to the Bank of Canada’s policy of pursuing looser monetary conditions. Expectations are also clear amongst firms for further rate cuts in the coming months, with these seen as key in helping stimulate growth of sales and activity over the coming year."
