Leading indicators

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June 2011 (Previous release)

The composite index rose 0.2% in June after a 0.8% gain in May. In June, 4 of the 10 components declined compared with none the month before. Most of the reversals occurred in manufacturing, where all 3 components swung from gains the month before to declines or no change. Much of the downturn in manufacturing originated in the auto sector, where the disruption of the global supply chain originating in Japan's tsunami disaster temporarily slowed assemblies in Canada in the spring.

Composite leading indicator

Chart description: Composite leading indicator

The ratio of manufacturing sales to inventories fell for the first time in seven months, led by the drop in auto shipments. The average workweek at factories also posted its first decline in 10 months. New orders for durable goods were unchanged, remaining at the high level established after a 9.3% surge in April as a result of the booking of several large orders in the aerospace industry.

Household spending remained mixed. The housing index increased 0.3%, as housing starts in June reached their highest level of the year. Gains in housing helped to sustain growth in furniture and appliance sales. However, spending on other durable goods fell 0.3%, partly because a shortage of some vehicles from Japanese-owned producers appeared to delay purchases.

Elsewhere, the leading indicator for the United States rose by 0.4% for the second straight month, as exports and business investment increased to offset a slowdown in consumer spending. The Toronto stock market in June posted its largest drop since last summer, led by a retreat in energy prices.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the August 2011 issue of Canadian Economic Observer, Vol. 24, no. 8 (11-010-X, free). For more information on the economy, consult the Canadian Economic Observer.

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.