TORONTO (Reuters) - The pace of purchasing activity in Canada notched a surprise decrease in July, according to Ivey Purchasing Managers Index data released on Wednesday.
The seasonally adjusted index fell to 48.4 in July from 55.3 in May. Analysts polled by Reuters had expected an adjusted reading of 57.0.
“While often a volatile series on a monthly basis, the longer-term trend in the Ivey PMI had shown a steady improvement beginning in May after a prolonged period of deceleration,” David Tulk, chief Canada macro strategist at TD Securities, said in a research note.
“We are inclined to fade the weakness in this single print and anticipate that the uptrend will resume in the months ahead.”
A reading below 50 on the Ivey indicates that the pace of activity decreased from the previous month. This was the first such decrease since November of last year.
The seasonally unadjusted index fell to 45.7 from 56.6.
The Ivey data follows the RBC Canadian Manufacturing Purchasing Managers’ index last week, which showed the pace of Canadian manufacturing growth eased to a three-month low in July.
Tulk said a stronger U.S. economy should help lift exports and provide support to the Canadian economy, and he noted that some of the details in the July Ivey report were better than the headline would suggest.
The employment index edged up to 50.4 from 49.9, while the inventory index rose to 53.3 from 51.6.
The price index fell to 52.8 from 59.0, reflecting a growing disinflationary environment.
Reporting by Alastair Sharp and Solarina Ho; Editing by Peter Galloway