Key facts
- Canada's services economy contracted in August, reaching its lowest level since February.
- Rising trade tensions and geopolitical instability impacted new business volumes.
- The new business measure for Canada's services sector hit its lowest point since January.
- Confidence about the future among Canadian service providers was at its lowest in over a year.
- Input prices remained elevated due to rising energy prices.
- Canada's composite PMI fell to its lowest level since March.
Canada's services economy contracted at its steepest pace in six months in August, with the headline Business Activity Index falling to 46.8 from 49.1 in July, according to S&P Global's Canada services PMI data. This downturn was attributed to escalating trade tensions and geopolitical instability, which weighed on new business volumes. The new business measure dropped to 46.1, its lowest level since January, as ongoing uncertainty made clients reluctant to commit to new contracts. Confidence about the future among Canadian service providers declined to its lowest level in over a year. Rising energy prices contributed to elevated input prices, though the input price measure dipped slightly from July. The S&P Global Canada Composite Purchasing Managers' Index fell to 47.8 in August, its lowest level since March, driven by the weakness in the services sector. In contrast, Canada's manufacturing PMI edged down to 53.0 in August but continued to indicate expansion. Separately, South Africa's private sector activity grew slightly with its PMI rising to 50.5, while Kenya's private sector contracted in August with its PMI falling to 49.7 due to supply constraints and cost pressures.