Economic sentiment in Canada dives to lowest since 2020

By Ovunc Kutlu

ISTANBUL (AA) - Economic sentiment in Canada plummeted in July to its lowest level since 2020, S&P Global said Thursday in a report.

"Confidence about next year’s output may remain positive, but sentiment is at its lowest level since May 2020," Paul Smith, an economics director at S&P Global Market Intelligence, said in the report.

"It seems that the Bank of Canada’s recently announced second cut in interest rates could not have come soon enough as firms look to lower borrowing costs and reduced inflation to help reinvigorate demand in the coming months," he added.

The Bank of Canada on July 24 reduced its policy rate by 25 basis points to 4.5%, marking the second rate cut in more than four years.

The S&P Global Canada Manufacturing Purchasing Managers’ Index (PMI) remained below the crucial 50 neutral level in July, extending its deterioration to 15 months.

Manufacturing PMI fell to 47.8 in July, from 49.3 in June, signaling the steepest worsening of operating conditions so far this year.