S&P Global Services PMI

What is S&P Global Canada Services PMI?

The S&P Global Canada Services Purchasing Managers' Index (PMI), a monthly gauge of business conditions, measures direction of change in private services output. Published by S&P Global Market Intelligence, a division of S&P Global, it surveys about 400 firms chosen by sector and size using national output shares. It covers hotels, restaurants, travel, transport, information, communication, finance, insurance, professional services and real estate, excluding retail, manufacturing, construction and public sector. It tracks breadth of monthly change, not size of national output growth, in a series that began with the October 2023 survey month.

When is it released and what happens each release?

Responses are usually collected in the second half of each survey month, with firms reporting change against the previous month. Results appear early in the next month, typically on the 3rd to 5th business day. Release is at 9:30 a.m. Eastern Time (14:30 UTC), shifting with weekends and holidays. Each release also brings the Composite PMI Output Index, a combined manufacturing and services gauge, plus separate demand, jobs, backlogs, price and expectations gauges. Survey answers are never revised, though seasonal adjustment factors may be revised, and 50 means no change, higher readings expansion and lower ones contraction.

What moves S&P Global Canada Services PMI?

The headline is Business Activity alone, the gauge of output change, with no component weights, and moves reflect demand, staffing, backlogs, costs, prices and expectations.

• New Business: change in new work received, split into total and export orders.
• Employment: change in staffing levels as firms hire or trim teams.
• Outstanding Business: change in backlogs, the stock of unfinished work.
• Input Prices: change in operating costs such as wages and supplier prices.
• Prices Charged: change in average selling prices charged to clients.
• Future Activity: expected business activity over the coming 12 months.

The historical example is the October 2023 survey, in the first public release on November 3, 2023. It put the headline at 46.6, down from 47.8, matching 46.6 in August 2022 and signalling deepening contraction. New work fell for a third straight month, at the sharpest pace in over a year, as high prices and rates cut client budgets.

Even so, firms kept hiring skilled staff and raised wages to ease living costs and retain workers. Economics Director Paul Smith said rate rises were dampening activity while tight labour and wage growth kept inflation high.

How is S&P Global Canada Services PMI calculated?

1. Diffusion index: for each survey topic, answers are split into higher, unchanged and lower shares. Each index runs from 0 to 100.
2. Formula: the index equals the higher share plus half the unchanged share, or I = H + 0.5 x U, where lower answers add 0. For example, shares of 30 higher, 50 unchanged and 20 lower give I = 30 + 0.5 x 50 = 55, above 50, so expansion.
3. Seasonal adjustment: each index is then adjusted for normal calendar patterns.
4. Headline: the Services PMI is exactly the adjusted Business Activity index, with no extra weighting.
5. Composite: the Composite PMI Output Index is a national output (GDP) weighted average of manufacturing output and services activity. Weights reflect sector size in official GDP data.

Key point: the headline is the single Business Activity diffusion index, not a weighted mix, and it is not comparable with the manufacturing headline. It is also separate from the domestic Ivey PMI, being the S&P Global survey of its own panel.