Canada's Ivey PMI index unexpectedly falls in June

Fri Jul 6, 2012 11:11am EDT
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By Claire Sibonney

TORONTO (Reuters) - The pace of purchasing activity in the Canadian economy fell to its lowest level in almost a year in June, according to Ivey Purchasing Managers Index data released on Friday.

The data showed the seasonally adjusted index fell to 49.0 in June from 60.5 in May. Analysts polled by Reuters had forecast a reading of 55.8. The index was last below the 50 level in July 2011, when it was 46.8.

Any index reading below 50 indicates that activity contracted from the preceding month.

"In light of renewed euro-zone stresses and slowing global growth, the theme of caution does not respect international borders," David Tulk, chief Canada macro strategist at TD Securities, said in a research note.

"Despite a more advanced economic recovery, optimism among Canadian businesses has understandably faded," he added, noting that the report was presaged by weak U.S. ISM manufacturing data earlier this week.

The data showed the U.S. manufacturing sector unexpectedly contracted in June for the first time in three years.

Ivey's employment index rose to 59.3 in June from 46.3 in May, but that data was overshadowed by an official report released earlier on Friday that showed Canada's job growth slowed in June for a second straight month.

The Statistics Canada jobs report was a reality check after outsized employment gains earlier this year with business confidence worsening due to the European debt crisis and the stalled U.S. economy.   Continued...

Workers piece together outerwear on the manufacturing floor of Canada Goose's facility in Toronto January 17, 2012. REUTERS/Fred Thornhill