(Toronto, Canada) – Canadian service businesses reported a fifth consecutive month of declining activity in October, with weaker demand, higher operating costs and another reduction in staffing, according to S&P Global survey results released November 4.

The Canada Services PMI Business Activity Index slipped to 48.1 from 48.3 in September. Readings below 50 signal contraction. The latest result extends a run of below-threshold readings that began in June, according to Reuters and Dow Jones reporting on the release.

The new October figures show that service providers continued to face pressure on both sales and costs at the start of the fourth quarter. They are a separate indicator from Wednesday’s merchandise-trade report, measuring business conditions rather than the value of goods crossing the border.

Demand weakened further. The survey’s new-business index declined to 48.0 from 48.5, while new export business recorded its sharpest fall since November 2025, Reuters reported. Companies surveyed described soft sales, with tariffs weighing particularly heavily on foreign orders, according to Dow Jones.

Paul Smith, economics director at S&P Global Market Intelligence, attributed the subdued performance to uncertainty surrounding Canada–U.S. trade and rising prices. That uncertainty continued to undermine demand and business confidence, he said in comments carried by both news services.

Businesses also reported mounting expenses. The input-prices index rose to a three-month high of 63.9 from 62.2 in September, while the measure of prices charged to customers held at 53.4. Fuel surcharges, transportation expenses and tariffs contributed to cost pressures, Reuters reported.

Weak demand and competition limited companies’ ability to pass those increases on to customers. Dow Jones reported that service providers reduced employment for a second successive month, although the staffing decline was modest.

Expectations also softened. The future-activity index fell to 57.7 from 61.4, with S&P Global describing confidence as historically subdued.

The weakness extended beyond services. Canada’s composite PMI, which combines manufacturing and services, fell to 48.1 from 48.7. Manufacturing’s separate index dropped to 49.6 from 51.5, moving below the growth threshold for the first time this year.

Accompanying image: editorial illustration.

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