Leading indicators

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The composite leading index rose by 0.5% in December, matching its gains in October and November. Of the 10 components, 5 advanced, led by stock market prices and household spending. Most components related to manufacturing softened in December.

The housing index increased 1.5%, its second straight gain after six consecutive declines. The upturn was led by a continued rebound in existing home sales. The gradual improvement in existing home sales was also reflected in a slower rate of decline in furniture and appliances sales in the last two months compared with the previous four. Consumer spending on other durable goods rose 1.2%, the largest advance in over a year.

The Toronto Stock Exchange increased 2.8% in December. Metals and minerals continued to be the driving force, hitting new record highs for the third straight month.

Most manufacturing components weakened. New orders for durable goods fell 1.7% after a small gain. The ratio of shipments to inventories posted its first dip since May 2009, as inventory levels increased in recent months while sales growth slowed. In contrast, there were some positive developments in manufacturing: the US leading index rose 0.5%, a sign of strengthening US demand, while manufacturing employment in Canada rose sharply in December.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the February 2011 issue of Canadian Economic Observer, Vol. 24, no. 2 (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) or Philip Cross (613-951-9162) or Cindy Bloskie (613-951-3634; ceo@statcan.gc.ca), Current Economic Analysis Group.