Leading indicators

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The composite leading index was unchanged in June after increases of 0.1% in April and 0.2% in May. Both new orders for manufactured goods and the housing index turned down, after exceptional gains the month before. Elsewhere, household spending remained the driving force behind growth, a reflection of strong labour market conditions.

Consumer spending on durable goods continued to grow strongly so far this year. Average hourly earnings have increased by 4.4% since June 2007, twice the rate of inflation from May 2007 to May 2008. The downturn in the housing index followed a sharp turnaround in May.

Manufacturing remained mixed. The drop in new orders continues its seesaw pattern of recent months. This volatility partly originates in the growing importance in manufacturing of the aerospace industry, where orders also tend to fluctuate markedly from month to month. Inventories levelled off, and higher output in April suggests firms at least temporarily were satisfied with the ratio of stocks to shipments. The average workweek also stabilized in May and June, and employment growth at factories resumed in these two months.

The leading index for the United States fell 0.1%, its smallest decline since October 2007. Gains in manufacturing orders helped offset lower consumer confidence and building permits.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the August 2008 issue of Canadian Economic Observer, Vol. 21, no. 8 (11-010-XWB, free), which will soon be available. For more information on the economy, consult the Canadian Economic Observer.

A more detailed analysis of the components is available online.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Philip Cross (613-951-9162; ceo@statcan.gc.ca), Current Economic Analysis Group.

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