The S&P Global Canada Services PMI fell to 46.3 in September 2025 from 48.6, marking the third straight contraction and the weakest reading in three months. A lack of new business, particularly from exports, weighed on activity, while spare capacity led to the steepest decline in outstanding work in over five years. Staffing levels were cut for the first time since April, with firms citing non-replacement of leavers and layoffs. Despite the tough climate, sentiment for the year ahead improved to its highest since October 2024. Cost pressures rose, driven by staffing and fuel expenses, leading to the sharpest input price increase in three months, though competitive pressures limited firms’ ability to raise selling prices.