- Prior was 47.8
- The latest decline in business activity was closely linked by panellists to a reduced level of new work.
- Companies reported that new work received was down for a third month in a row, and to the greatest extent for over a year.
- Panellists widely commented on raising typical wage levels in October, largely to help staff with living expenses and to retain workers
This is a new release from S&P Global but the data collected for it goes back to 2017.
Paul Smith, Economics Director at S&P Global Market Intelligence, said:
“The first public release of the S&P Global Canada Services PMI showed that the nation’s vast services economy, the key contributor to overall economic output in Canada, remained mired in contraction territory during October. Moreover, operating conditions faced by service providers are worsening at a greater pace, with both activity and new business declining to their greatest degrees since August 2022.
“Firms were clear on the reasons behind the challenging market environment they currently face, reporting that elevated prices, the high cost of living and high interest rates were leading to budget cuts and reduced discretionary spending amongst clients.
“This suggests that the Bank of Canada’s sustained period of rising interest rates is having a dampening effect on economic activity. However, data from the PMI survey encapsulates the challenges the central bank currently faces, and why it continues to adopt its hawkish stance. Firstly, the labour market remains tight, with October’s survey suggesting that firms continue to recruit staff, especially skilled workers. Secondly, elevated wage growth is leading to stubbornly high inflation.”
“Whilst the release of new timely PMI data will be welcomed by policymakers, it nonetheless reinforces the current tightrope they have to walk between bringing inflation down on the one hand and avoiding economic recession on the other.”
