- Prior was 46.6
- Composite PMI 47.0 vs 47.1 prior
- Operating expenses continued to rise sharply, underpinned by increased wage costs
- Competitive pressures restricted the degree to which costs were passed on to clients
- Following two months of modest growth, employment numbers stalled.
Notable:
Staffing costs were a major driver of higher operating expenses during March. According to the latest data, input prices rose steeply and at a faster pace than in February. Sharp inflation was partially linked to high fuel prices and suppliers increasing their charges.
Paul Smith, Economics Director at S&P Global Market Intelligence, said:
"Canada’s services economy remained mired in a downturn during March, with both activity and new business volumes declining again. The restrictive impact on market activity of high prices and elevated interest rates remains plain to see. Firms continue to look towards the central bank to loosen what to many feels like a current restrictive monetary stance in the coming months. Indeed, many panellists now view this as being crucial in helping to restimulate economic growth over the next year.
"On the price front, input price inflation nonetheless remains frustratingly elevated, underpinned by rising salary expenses. Such trends are likely to keep the Bank of Canada wary of elevated inflation expectations, although policymakers will be heartened by a further softening of output charge inflation to its lowest of the year so far."
