FX.co ★ Canada Services PMI Remains in Contraction

Canada's S&P Global Services PMI edged up to 49.1 in July 2026 from 47.1 in June but remained below the neutral 50.0 mark, indicating a second consecutive—though less severe—contraction in the services sector. Business conditions were still constrained by tariffs and geopolitical tensions, which dampened both current activity and future expectations. Output and new orders declined again, albeit at a slower rate, while business confidence slipped to its lowest level of 2026. At the same time, input cost inflation stayed elevated, fueled by tariffs, higher energy and fuel prices associated with the Middle East conflict, and rising labor costs. Despite subdued demand, firms continued to increase selling prices, underscoring persistent inflationary pressures and ongoing risks to the broader economic outlook.