Canada’s S&P Global Services PMI rose to 45.6 in May 2025 from 41.5 in April, the highest in three months but still firmly in contraction territory. The sector remained under pressure from macroeconomic uncertainty and tariff-related disruptions. Activity and new business fell again, though at slower rates, while business confidence improved to its strongest since January. Employment posted marginal growth, helping ease backlogs. Input price inflation accelerated, with operating costs rising due to wages, tariffs, and supplier charges. This led to the steepest increase in output prices in a year. Demand showed signs of stabilization, but cost pressures remain a key concern for service providers.