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Leading indicators

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July 2009 (Previous release)

The composite leading index rose 0.4% in July, after small declines in May and June were revised up to no change. The increase in July was the first advance since August 2008, just before the turmoil in global financial markets deteriorated significantly. Overall, 6 of 10 components expanded in July, the most since May 2008. Just four months earlier, the money supply was the only component that increased, when the overall index fell 1.4%, its fastest rate of decline in the current downturn.

Composite leading indicator

The stock market and housing continued to post the largest gains, although the stock market leapfrogged ahead of housing with a 5.7% increase. The upturn in household spending spread from housing to other durable goods, which posted their first advance in over a year. Not all sectors of household spending were upbeat. Furniture and appliance sales continued to trend down, while personal services pulled down services employment.

The leading indicator for the United States continued to improve, rising 0.4% for the first back-to-back gain in about two years. House sales and starts turned up in the last three months, while industrial output stabilized. The improvement in the US economy was not reflected in Canada's manufacturing sector, where new orders continued to decline, falling nearly 6%. Meanwhile, the ratio of shipments to inventories continued to be restrained by falling exports, notably autos and forestry products.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the September 2009 issue of Canadian Economic Observer, Vol. 22, no. 9 (11-010-X, free). For more information on the economy, consult the Canadian Economic Observer.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Francine Roy (613-951-3627;, Current Economic Analysis Group.

Table 1

Leading indicators
  February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 Last month of data available
              % change
Composite leading indicator (1992=100) 218.9 215.8 213.8 213.7 213.6 214.5 0.4
Housing index (1992=100)1 101.5 97.7 96.7 97.8 102.6 107.2 4.5
Business and personal services employment ('000) 2,923 2,917 2,914 2,913 2,904 2,898 -0.2
S&P/TSX stock price index (1975=1,000) 8,968 8,759 8,770 9,047 9,383 9,915 5.7
Money supply, M1 ($ millions, 1992)2 187,580 189,656 191,640 193,057 194,068 195,395 0.7
US Conference Board leading indicator (1992=100)3 120.7 120.1 119.7 119.7 120.0 120.5 0.4
Average workweek (hours) 36.7 36.5 36.3 36.5 36.5 36.6 0.3
New orders, durables ($ millions, 1992)4 26,584 23,728 21,942 19,354 17,556 16,522 -5.9
Shipments/inventories of finished goods4 1.69 1.64 1.60 1.57 1.56 1.54 -0.025
Retail trade              
Furniture and appliance sales ($ millions, 1992)4 2,940 2,917 2,881 2,849 2,824 2,812 -0.4
Other durable goods sales ($ millions, 1992)4 9,387 9,355 9,254 9,203 9,206 9,397 2.1
Unsmoothed composite leading indicator 211.4 210.2 211.9 217.8 216.6 216.4 -0.1
Composite index of housing starts (units) and house sales (multiple listing service).
Deflated by the Consumer Price Index for all items.
The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the month immediately preceding.
The figures in this row reflect data published in the month indicated, but the figures themselves refer to data for the second preceding month.
Difference from previous month.