Canada's services PMI shows August activity down for third straight month
By Fergal Smith
TORONTO, Sept 5 (Reuters) -Canada's services economy contracted for a third straight month in August as firms employed less workers and wildfires contributed to a slowdown in new business, S&P Global Canada services PMI data showed on Thursday.
The headline business activity index edged up to 47.8 from 47.3 in July, but was holding well below the 50 no-change threshold, signaling reduced activity.
"The performance of Canada's services economy remained subdued in August, with concurrent solid declines in both activity and new business signalled by the survey," Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.
"Firms bemoaned slow market conditions and a general lack of demand, with some also commenting that wildfires were having a negative impact on their businesses."
The new business index fell to a six-month low of 47.6, down from 49.2 in July, while the measure of employment dropped below 50 for the first time since last December.
Hundreds of wildfires have ravaged the western provinces of Alberta and British Columbia in recent months, threatening critical infrastructure and forcing the evacuation of a number of communities.
"Companies were also subdued when assessing the outlook, signalling concerns that borrowing costs will remain too high, despite expectations of rate cuts in the coming months," Smith said.
The Bank of Canada on Wednesday cut its benchmark interest rate for a third time since June, lowering the rate by 25 basis points to 4.25%.
The S&P Global Canada Composite PMI Output Index, which captures manufacturing as well as service sector activity, rose to 47.8 last month from 47.0 in July, marking its highest level since May.
Data on Tuesday showed Canada's manufacturing PMI came in at 49.5 in August, up from 47.8 in July.
Reporting by Fergal Smith; Editing by Paul Simao
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
