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Investing.com -- The services economy in Canada experienced a deeper downturn in March due to U.S. tariffs and the onset of a general election campaign, which increased economic uncertainty and led to a reduction in client spending, according to S&P Global’s Canada services Purchasing Managers’ Index (PMI) data on Thursday.
The main Business Activity Index dropped to 41.2 in March, down from 46.6 in February. This is the lowest level it has reached since June 2020, which was shortly after the start of the COVID-19 crisis.
Paul Smith, the economics director at S&P Global Market Intelligence noted that Canada’s services economy saw widespread unprecedented drops in activity and new business throughout March. This occurred against a backdrop of an unpredictable economic and political environment.
Smith highlighted that the uncertainty primarily arose from the U.S. tariffs and the unpredictable nature of their application and scope. This led to significant nervousness and a pullback in spending among businesses and consumers alike.
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