Canada’s services economy contracted in June as geopolitical uncertainty and elevated prices dampened demand, according to S&P Global’s Canada services PMI data.
The headline Business Activity Index fell to 47.1 last month from 50.6 in May, marking the lowest level since February. A reading below 50 shows a contraction in activity.
Geopolitical Uncertainty and Elevated Prices
Paul Smith, economics director at S&P Global Market Intelligence, stated that Canada’s service sector returned to contraction territory during June as worries related to geopolitics and government policies resurfaced, weighing heavily on activity and sales.
The new business index was at 47.5, down from 49.8 in May, and confidence in the outlook dropped to its lowest level since November.
Some shipping has resumed through the Strait of Hormuz following an interim peace deal between the U.S. and Iran, but the months-long closure of the vital global supply route for oil and liquefied natural gas has lifted inflation globally.
Canada has one of the highest food inflation rates among Group of Seven countries. Prime Minister Mark Carney has pledged to invest more than C$1 billion to promote competition among grocers and food processors.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
