Canada Ivey, building data show subdued recovery
By Louise Egan and Jennifer Kwan
TORONTO/OTTAWA (Reuters) - Canadian purchasing activity ticked higher in November and the cooling housing market dragged down the value of October building permits as the economic recovery advanced but at a subdued pace.
The Ivey Purchasing Managers Index showed on Monday a rise to 57.5 in November from 56.7 in October. This was just above the market forecast of 56.
The PMI can be used to measure business optimism and forecast growth. A reading higher than 50 indicates activity increased from the preceding month and a lower reading reflects a slowing or decrease.
The value of building permits tumbled 6.5 percent in October, Statistics Canada said in a separate report, but the decline followed two months of gains and levels were still comparable to those prior to the recession.
"Given the deceleration in a wide range of economic indicators, one would expect that the Ivey PMI will remain in the 50-60 range that is consistent with a gradual recovery through the balance of the year and into 2011," David Tulk, senior macro strategist at TD Securities, wrote in a note.
The employment and prices components of the index stayed above 50 for the month, while inventories and supplier deliveries were below 50.
"Subjectively, the decent rise in the employment index seems out of context with the net 15,000 jobs created in November, a number insufficient to keep up with the natural growth in the labor force," said Stewart Hall, economist at HSBC Canada.
The reports come after recent data showed Canada's economy gained fewer jobs than the market expected, while a separate report showed the economy disappointed in the third quarter with the weakest growth rate in a year. Continued...