Canada's Ivey PMI rises in December, but worries persist

Mon Jan 7, 2013 11:46am EST
 

By Alastair Sharp

TORONTO (Reuters) - Purchasing activity in Canada rose modestly in December, according to Ivey Purchasing Managers Index data released on Monday, but the reading failed to impress economists as Canada's economy struggles to grow.

The seasonally adjusted index rose to 52.8 in December from 47.5 in November. Analysts polled by Reuters had expected a reading of 49.5.

That was a modest uptick to close out the fourth quarter, but coupled with falls in Ivey's employment, inventories and prices data, painted a less than rosy economic picture.

"Overall, if you look at the sub-indices, the results are not that impressive, especially the employment number, which went below 50 for the first time in seven months," said Krishen Rangasamy, a senior economist at National Bank Financial in Montreal.

The Ivey employment index fell to 49.2, its lowest reading since May last year, from 55.1 in the previous month.

A reading below 50 on the index data indicates that the pace of activity fell from the previous month.

Statistics Canada surprised investors last week with a robust jobs report for December that was at odds with other figures pointing to sluggish growth.

The seasonally unadjusted Ivey PMI index dropped to 43.1 from 46.4, marking its lowest point since January 2011.   Continued...