UPDATE 1-Canada's Ivey purchasing index surges in October

Wed Nov 6, 2013 11:58am EST
 
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TORONTO Nov 6 (Reuters) - The pace of purchasing activity in Canada jumped in October, with supplier deliveries returning to growth, according to Ivey Purchasing Managers Index data released on Wednesday.

The seasonally adjusted index rose to 62.8 from 51.9 in September, far exceeding analysts' expectations for a 51.0. A reading above 50 indicates an increase in the pace of activity.

The unadjusted index rose to 64.2 from 59.4.

The accompanying details, however, were not as optimistic as the headline number would suggest, David Tulk, chief Canada Macro Strategist at TD Securities, wrote in a research note.

The employment index fell to 51.7 from 53.5 in the previous month while the inventory index dipped to 53.6 from 54.2.

The supplier deliveries index stood at 52.4 after falling to 45.3 in the previous month while the prices reading was down to 59.5 from 64.0.

The report was similar to the RBC PMI data released last Friday, which showed the pace of growth in the Canadian manufacturing sector picked up in October to its strongest level in two and a half years as companies saw greater demand for their products.

"Given the observed improvement in the ISM surveys, there is hope that the (U.S. government) shutdown will exert a smaller drag on the U.S. economy through Q4 than previously feared," said Tulk.

"This bodes well for Canadian exports, but note that any improvement is expected to be marginal at best, so the theme of generally sluggish growth will continue to carry the day."