Canadian March S&P Global services PMI 46.4 vs 46.6 prior

• 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.”

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