Leading indicators

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The composite leading index rose 1.0% in May after a 0.9% increase in April. The May increase equaled the largest advance this year. In comparison, the composite leading index rose 0.4% as recently as December 2010. In May, 9 of the 10 components increased, 1 more than the month before, while 1 declined. The manufacturing sector showed the largest improvement from the previous month.

New orders for durable goods increased 9.8% in volume, its largest advance since the recovery began. Much of the hike in orders originated in aerospace. The ratio of shipments to inventories posted a fourth straight advance, as sales rose steadily while inventories leveled off after three straight declines. The average workweek lengthened for the fifth straight month.

The indicators related to household spending remained mixed. The housing index continued to decline, down 0.6%, as a dip in house sales outweighed a rebound in housing starts. Furniture and appliance sales recorded their largest gain in over a year, while spending on other durable goods rebounded 0.2% after a drop the month before.

The financial indicators continued to slow. The trend of stock market prices in May posted its smallest increase since the autumn of 2010, hampered by lower commodity prices. The real money supply posted its smallest gain in over two years.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the July 2011 issue of Canadian Economic Observer, Vol. 24, no. 7 (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 Philip Cross (613-951-9162; ceo@statcan.gc.ca), Current Economic Analysis Group.