Canada’s services sector reset: from slow decline to faint flicker of renewal

The services industry in Canada appears to have turned a corner, though the light ahead remains dim and patchy. According to data from S&P Global Market Intelligence, the headline services PMI rose to 50.5 in October 2025, up from 46.3 in September, breaking above the 50.0 threshold that demarcates expansion from contraction.  While the reading signals only marginal growth, its arrival carries significance given the sustained downward trajectory seen for much of the preceding year.

The improvement is anchored in two noteworthy shifts. First, the pace of decline in business activity has eased markedly. In July the index stood at 49.3, while in August it slipped to 48.6, nevertheless, the trend of contraction showed signs of moderation.  Then, by October the return to (slight) expansion suggests that some firms are beginning to respond to stabilising domestic demand, easing cost pressures and improving sentiment. That said, pockets of weakness persist. Despite the headline reading, new business volumes continued to fall for the 11th consecutive month and export work remained especially fragile. 

Delving deeper, this shift holds important implications for talent in the services sector: firms that have held back hiring may now begin to re-engage, but selectively and cautiously. With activity turning from steep decline toward flat or modest growth, staffing needs will be shaped less by broad expansion and more by operational resilience, flexibility and rebounding marketplaces.

In practical terms, recruitment demand is likely to emphasise roles tied to client-facing operations, back-office cost efficiency and cross-functional capacity rather than high-growth hiring programmes. The transition from contraction to marginal expansion tends to favour staffing partners who offer agile, contract or project-based talent pools and who can serve clients with needs in areas such as logistics, IT support for service platforms, customer success and digital transformation initiatives.