TORONTO — Canada’s services economy contracted at a steeper pace in June as uncertainty generated by US trade policy depressed activity and cost pressures increased, S&P Global’s Canada services PMI data showed on Friday.
The headline Business Activity Index fell to 44.3 last month from 45.6 in May, marking the seventh straight month the index has been below the 50 threshold. A sub-50 reading indicates contraction in the sector.
“Canada’s services economy remained deep inside contraction territory during June, as uncertainty caused in the main by US trade policies continued to weigh heavily on activity and new business volumes,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement.
“International demand was again especially hard hit, and the outlook remains subdued given widespread uneasiness and challenges in forecasting business trends in the months ahead.”
Canada sends about 75 percent of its exports to the United States, including autos, steel and aluminum, which have been hit by hefty US tariffs.
Prime Minister Mark Carney and US President Donald Trump have agreed to reach some form of a trade deal by July 21.
Still, confidence in the outlook remained subdued. The Future Activity Index was at 54.9, down from 58.9 in May and its lowest level since March.
