Through several indices, growth signals are starting to show, although unevenly
Ivey PMI - July 2025
In July 2025, Canada’s economic landscape revealed a striking contrast, a rising tide buoyed by private-sector confidence, punctuated by a lingering chill in traditional sectors. This unfolding narrative, laid bare by the latest array of Purchasing Managers’ Indices, offers a compelling backdrop for staffing and recruitment firms navigating a shifting terrain.
Chief among the revelations was the Ivey Purchasing Managers Index. The Ivey PMI leapt to 55.8, marking its most robust reading since July 2024 and signaling a confident rebound in activity across the Canadian economy. Beneath the surface, the employment sub-index edged into expansion at 51.2, while price pressures, though still intense, relaxed slightly to 68.5 . This upswing speaks of renewed momentum in purchasing and broader business sentiment.
Yet, when one peels back to examine sector-specific dynamics, a more nuanced picture emerges. The manufacturing sector continues to struggle. Although its PMI ticked up modestly to 46.1 from June’s 45.6, it remains firmly in contraction territory for the sixth consecutive month. Trade tensions and tariffs have inflicted sustained damage, prompting cutbacks in output, new orders, and inventories.
Meanwhile, the services sector appears to be easing (but not yet reversing) its downward trajectory. The services PMI rose to 49.3, its highest since November, indicating that contraction continues but at a much softer pace. Business activity remains below the neutral 50 mark, yet rising optimism and improved forward-looking sentiment (future activity index at 60.9) hint at a nascent turnaround.
So how do these disparate signals, from the broad-based strength of the Ivey PMI to the sectoral divergence of manufacturing and services, translate into real-world implications for the staffing and recruitment industry?
A Tale of Two Economies
The Ivey PMI’s vigor suggests that companies outside the beleaguered manufacturing sector are gaining steam, particularly in areas such as logistics, supply chain management, business operations, and perhaps consumer-oriented services. These are the areas where staffing demand is likely heating up fastest. Recruiters can capitalize by pivoting focus toward roles that support this resurgence: operations coordinators, logistics planners, back-office support, and digital business services.
However, manufacturing firms remain cautious. The ongoing downturn, driven by tariffs and soft demand, continues to temper hiring. In this environment, staffing agencies may need to offer more flexible solutions, such as short-term contracts, project-based placements, or on-demand staffing, to accommodate clients’ need for carefully managed labor costs amid uncertainty.
Meanwhile, the service sector’s improving, but still restrained performance suggests a cautious optimism. As business confidence rises and future activity forecasts brighten, there’s a growing pipeline of hiring potential. Recruitment firms that position themselves as strategic partners, able to tap into emerging needs in customer support, financial services, health-admin roles, and digital infrastructure, stand to benefit as services gradually recover.
As you drive into your local business district, you’d notice a subtle shift. Where once manufacturing humming away in factories and plants underpinned growth, now an understated bustle fills offices, hubs, and warehouses. Purchasing managers report renewed procurement and rising economic confidence as indicated by the Ivey PMI cresting 55.8, casting ripples of opportunity across sectors ripe for staffing.
Yet, factories remain guarded. At machine-lined assembly floors, managers hesitate, wary of tariffs and uncertain export demand. Their employment indexes languish in contraction. That signals caution. Recruiters notice: permanent hires here remain scarce. More demand is coming in the form of skilled contract workers or consultants; short-term, agile solutions for unpredictable needs.
Over in service-heavy corridors, the hum is softer but stronger than recent months. Companies are tentatively hiring, encouraged by a services PMI inching toward stability, though the lift isn’t yet complete. Recruiters adept at aligning talent with expectations of a recovering, but still fragile, services sector will be most in demand.
Smart Moves for Staffing Firms
Canada stands at an inflection point. The Ivey PMI reflects a broad-based entrepreneurial pulse, even as manufacturing lags and services inch toward equilibrium. For staffing and recruitment firms, the moment calls for agility. Navigating the gulf between sectors means leaning into growth areas while offering tailored resilience to sectors still under stress.
Those willing to adopt flexible hiring models, sharpen sector-specific expertise, and remain alert to the evolving mosaic of economic activity (purchasing growth here, tariffs there, rising confidence elsewhere) will find themselves not just surviving, but poised to help businesses rebuild momentum.