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Wednesday, November 23, 2005

Leading indicators

October 2005

The leading indicator posted a solid 0.5% gain in October, up from a 0.4% advance in September. Recent months have seen a shift in growth from household spending to investment demand. Housing was the only one of the ten components to decline, compared with two in September.

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New orders for durable goods saw the largest increase since January, driven by Western Canada. Primary metals, metal fabricating, machinery and transportation equipment all hit their highs for the year in response to the investment boom in the oil patch. These orders have begun to show up in shipments, which turned up after trending down over the previous five months. This left the ratio of shipments to inventories unchanged for only the second time this year. The average workweek held on to its recent gains. The investment surge also continued to boost employment in business services.

Household demand softened after leading growth most of the year. The slowdown was concentrated in Central and Eastern Canada, areas hard-hit by the jump in gasoline prices. As a result, vehicle sales tumbled in these provinces, reining in slightly the overall growth of durable goods sales from a three-year high. The housing index registered its first drop since March, led by lower housing starts.

The US leading indicator eked out only a 0.1% gain, partly slowed by the effects of Hurricane Katrina. Excluding the interest rate spread, the US index has essentially been little changed all this year.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

A more detailed analysis of the components is available on our Web site. From the Canadian Statistics page, choose National Accounts, then click on the banner ad for Canadian Economic Observer. From that page, choose Issues of CEO, then Composite Index. For more information on the economy, consult the November issue of Canadian Economic Observer, Vol. 18, no. 11 (11-010-XIB, $19/$182), now available.

For more information, or to enquire about the concepts, methods and data quality of this release, contact Francine Roy (613-951-3627; ceo@statcan.gc.ca) Current Economic Analysis Group.

Leading indicators
  May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 Last month of data available
              % change
Composite leading indicator (1992=100) 204.0 204.9 205.7 206.5 207.4 208.4 0.5
Housing index (1992=100)1 138.9 142.9 145.6 146.1 146.7 146.2 -0.3
Business and personal services employment ('000) 2,620 2,625 2,631 2,650 2,659 2,667 0.3
S&P/TSX stock price index (1975=1,000) 9,492 9,632 9,783 9,994 10,323 10,478 1.5
Money supply, M1 ($ millions, 1992)2 137,380 138,310 137,792 137,649 137,464 137,673 0.2
US Conference Board leading indicator (1992=100)3 124.7 124.6 124.9 125.0 125.2 125.3 0.1
Manufacturing              
Average workweek (hours) 38.2 38.2 38.3 38.3 38.4 38.4 0.0
New orders, durables ($ millions, 1992)4 25,165 25,444 25,598 25,370 25,521 25,819 1.2
Shipments/inventories of finished goods4 1.86 1.84 1.84 1.83 1.81 1.81 0.005
Retail trade              
Furniture and appliance sales ($ millions, 1992)4 2,185 2,215 2,236 2,247 2,251 2,259 0.3
Other durable goods sales ($ millions, 1992)4 7,831 7,929 7,995 8,089 8,189 8,254 0.8
Unsmoothed composite leading indicator 204.9 207.3 206.7 208.6 209.7 209.6 0.0
1.Composite index of housing starts (units) and house sales (multiple listing service).
2.Deflated by the Consumer Price Index for all items.
3.The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the month immediately preceding.
4.The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the second preceding month.
5.Difference from previous month.


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Date Modified: 2005-11-23 Important Notices