- Services PMI drops to 46.4 from 47.8, signaling accelerating contraction
- New business falls at fastest clip since December 2020
- Employment declines sharply, most since July 2020
- Inflation pressures ease, but remain elevated
- Firms pin hopes on future rate cuts to boost growth
Paul Smith, Economics Director at S&P Global Market
Intelligence, said:
“Canada’s service sector endured a challenging month
in September, with activity and new business volumes
declining markedly and job losses registered for a
second month in a row. Moreover, rates of contraction
accelerated as market conditions deteriorated since
August. This subdued environment subsequently helped
to explain why inflation rates eased to their lowest levels
in the past three-and-a-half years.
“The combination of softening labour market conditions,
slower inflation and declining output adds support to
the Bank of Canada’s policy of pursuing looser monetary
conditions. Expectations are also clear amongst firms
for further rate cuts in the coming months, with these
seen as key in helping stimulate growth of sales and
activity over the coming year.”