Leading indicators

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The composite leading index rose 0.2% in October, after a gain of 0.1% in September. In October, 5 of the 10 components increased, the same as the month before, while 4 declined, 1 fewer than in September. Household spending remained the strongest sector of the economy, while manufacturing remained the weakest.

The housing index advanced 1.6%, as the continued increase in housing starts since the spring was reinforced by a rebound in existing home sales in the last two months. Durable goods sales were mixed, with a dip in furniture and appliance sales offset by an increase in demand for other durable goods. Almost all of the growth in services employment was in the personal sector, as jobs in the business sector continued to post modest gains.

Composite leading indicator

Chart description: Composite leading indicator

New orders drove the weakness in manufacturing with a 5.5% decline, led by lower demand for aircraft. The ratio of shipments to inventories edged down for the fifth straight month, as a rebound in sales over the last two months was outweighed by higher inventories of finished products. This partly reflects Japanese-owned auto plants replenishing their inventories, after supplies were disrupted by a parts shortage in the spring and summer. The average workweek at manufacturing plants was unchanged, after four consecutive declines.

Available on CANSIM: table 377-0003.

Definitions, data sources and methods: survey number 1601.

This release will be reprinted in the December 2011 issue of Canadian Economic Observer, Vol. 24, no. 12 (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.