Canada's private sector activity shrinks in June

The S&P Global Canada Comprehensive PMI was 47.5, which was lower than the previous month's 50.6 when the Canadian private sector turned positive for the first time in a year.

Driven by a sharp drop in the service sector (47.1, May: 51.1), the factory sector (49.3, May: 49.3) declined for 14 consecutive months.

New orders declined in both sectors, and companies suggested that the general softening of the Canadian economy had kept customer demand low.

Despite the decline in new orders, companies continued to increase the number of employees. This is because the increase in employment of service providers has offset the decline in factory employment.

On the price side, cost inflation fell to the lowest level since 2021, so companies were able to raise production costs to their lowest level in the past 40 months.

Even so, business confidence was the weakest since January.

Source: S&P Global

Canada's overall PMI is expected to be 50.60 points by the end of this fiscal year.

Over the long term, according to the economic model, Canada's overall PMI is forecast to move around 54.60 points in 2025.