Canada S&P Global January services PMI 49.0 vs 48.2 prior

• Prior was 48.2
• Panellists primarily linked
  ongoing weakness in activity volumes to a reduction in new
  business, which also fell for a second successive month in
  January
• Inflation softest in three months

Paul Smith, Economics Director at S&P Global Market
Intelligence, said:

“Canada’s services economy experienced concurrent
falls in both business activity and new work during
January to signal another month of subdued sector
performance. Panellists continued to note soft
underlying market demand, with uncertainty weighing
on business decisions. This may reflect ongoing unease
over the impact of possible tariffs being applied on
Canadian goods and services exported to the United
States, and indeed this was cited as a real concern by
service providers themselves. Whilst firms are looking
to lower interest rates to help stimulate growth, tariff
worries ensured that confidence amongst panellists
remained well below trend.

“This uncertainty, plus general challenges in replacing
expired contracts, helped to explain why service
providers reported a marginal reduction in employment
during January. Nonetheless, staffing expenses
remained a source of broader input cost inflation for
firms, which remained high in January.”

Expect continued turmoil in Canadian survey indicators as the ongoing tariff spat really touched a nerve.

This article was written by Adam Button at www.forexlive.com.