Leading indicators

The composite leading index was unchanged for a second straight month in July, after small gains in April and May. Overall, 2 of the 10 components fell in July, versus 6 in June. However, the declines in housing and the average workweek in manufacturing were large enough to offset small increases in the 7 components that rose.

The housing index decreased by 2.9%, its largest decline since June 2002. Most of the drop originated in fewer housing starts. Consumer spending on durable goods continued to expand, although the rate of growth for auto sales slowed sharply after the hike in gasoline prices early this summer.

The manufacturing indicators remained mixed. New orders remained volatile, rebounding 1.3% from a sharp decline. This volatility largely reflects orders for aerospace, which have been oscillating around a long-term upward trend. The ratio of shipments to inventories levelled off after two straight declines. Shipments trended up for the first time in 2008. However, the average workweek in manufacturing fell 0.5% in July.

The United States leading indicator rose 0.1%, its first increase in 11 months. Real gross domestic product growth turned up in the second quarter, led by exports and business investment.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the September 2008 issue of Canadian Economic Observer, Vol. 21, no. 9 (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 now 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.

Table(s).