Wednesday, November 14, 2007

Leading indicators

The composite index rose 0.1% in October after a downward-revised gain of 0.3% in September. Of the 10 components, 6 increased, while 4 declined, the highest number of components to decline since October 2006. The weakness was concentrated in housing starts and new orders, which returned to more normal levels after exceptional gains in September. Growth was sustained by consumer spending and the financial sector.

The housing index fell 1.7% after three large monthly gains. Both components declined. Existing home sales in autumn retreated from the record highs set during the summer, while housing starts returned to more normal levels after a burst in the construction of multiple units sent overall starts to a 29-year high in September.

The underlying trend in household spending remained positive. Spending on durable goods rose another 0.6%, and auto sales remained strong in October. The personal sector was the driving force behind the growth in services employment in October.

The Toronto stock market continued to set new records. While energy stocks continued to benefit from record oil prices, there were notable gains in technology stocks as well.

Manufacturers continued to be squeezed between sluggish export demand from the US and the rising Canadian dollar. The US leading indicator eked out a 0.1% increase, as strong financial and labour markets overcame more declines in housing. New orders received by Canadian manufacturers fell 1.7%. Small declines in the average workweek and the ratio of sales to inventories are probably more indicative of the underlying trend in manufacturing.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the December 2007 issue of the Canadian Economic Observer. For more information on the economy in October, consult the November 2007 issue of the Canadian Economic Observer, Vol. 20, no. 11 (11-010-XWB, free), now available from the Publications module of our website.

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

Leading indicators
	May 2007	June 2007	July 2007	August 2007	September 2007	October 2007	Last month of data available
							% change
Composite leading indicator (1992=100)	226.3	227.0	227.8	228.4	229.0	229.2	0.1
Housing index (1992=100)1	147.7	146.4	148.4	149.6	151.3	148.8	-1.7
Business and personal services employment (thousands)	2,836	2,842	2,850	2,851	2,863	2,867	0.1
S&P/TSX stock price index (1975=1,000)	13,344	13,518	13,683	13,782	13,918	14,032	0.8
Money supply, M1 ($ millions, 1992)2	163,100	163,530	164,367	165,492	166,699	168,128	0.9
U.S. Conference Board leading indicator (1992=100)3	126.9	126.8	126.7	127.0	126.9	127.0	0.1
Manufacturing
Average workweek (hours)	38.5	38.5	38.5	38.5	38.4	38.3	-0.3
New orders, durables ($ millions, 1992)4	27,275	27,329	27,148	26,908	27,022	26,560	-1.7
Shipments/inventories of finished goods4	1.84	1.84	1.84	1.84	1.84	1.83	-0.015
Retail trade
Furniture and appliance sales ($ millions, 1992)4	2,633	2,652	2,673	2,680	2,703	2,721	0.7
Other durable goods sales ($ millions, 1992)4	8,950	9,033	9,150	9,195	9,251	9,306	0.6
Unsmoothed composite leading indicator	228.6	228.9	229.3	228.3	230.1	229.2	-0.4
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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