OTTAWA, Feb 5 (Reuters) - The pace of purchasing activity in Canada surged in January, pulling out of a minor contraction the month before, driven by an increase in companies’ inventories, the Ivey Purchasing Managers Index showed on Friday.
The seasonally adjusted index accelerated to 66.0 from 49.9 in December, exceeding analysts’ expectations for a slight pick up to 50.0. A reading above 50 indicates an increase in the pace of activity.
The unadjusted index rose to 56.7 from 42.5.
The index showed a build-up in inventories, with the measure rising to 61.5 from 50.8. Increased prices also sent the overall index up, with the gauge of prices jumping to 71.6 from 61.9. The Canadian dollar lost about 1 percent against the greenback in January.
The employment measure fell to 55.1 from 59.7, suggesting firms were struggling with the weak economy.
Reporting by Leah Schnurr Editing by W Simon