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The composite leading index rose 0.3% in August, equalling its average monthly gain over the last three months. Household demand remained the engine of growth, led by robust housing market conditions. Financial market conditions softened over the summer, but manufacturing activity firmed.
Household demand advanced across the board. Housing starts rebounded in August, offsetting a dip in the sales of existing homes. The underlying strength in housing demand was reflected in the steady growth of sales of furniture and appliances. Outlays for other durable goods continued to post healthy gains, although at a slower pace than in the spring when pay equity changes fuelled a surge in spending in Quebec.
After a strong start to the year, manufacturing activity slowed in the second quarter. The leading indicators related to manufacturing suggest that demand was firming as summer began. The rate of decline of new orders slowed appreciably, reflecting increases for capital goods. This firming of demand was reflected in a slight upturn in shipments, although not quite enough to offset higher inventories. The average workweek was steady for the third straight month, and manufacturing employment rose on balance in July and August after a lengthy period of decline.
The trend of the stock market levelled off over the summer, reflecting three straight small monthly declines in the unsmoothed index. The dip in stock prices accompanied turbulent conditions in the global financial system as investors re-assessed their valuations of risk.
Available on CANSIM: table 377-0003.
Definitions, data sources and methods: survey number 1601.
This release will be reprinted in the October issue of the Canadian Economic Observer. For more information on the economy in August, consult the September issue of the Canadian Economic Observer, Vol. 20, no. 9 (11-010-XIB, free).
For more information, or to enquire about the concepts, methods or data quality of this release, contact Philip Cross (613-951-3627; ceo@statcan.gc.ca), Current Economic Analysis Group.
Table(s).
