Ottawa – The Conference Board of Canada’s Composite Leading Index increased 0.2% in January 2014. A slowdown from the previous two months, the January index suggests that the upturn in the US economy has yet to show up in the Canadian economy.
Cold and stormy weather played a role in the deceleration of the January Index. However, the US Leading Indicator, produced by The Conference Board Inc., posted a 0.5% gain in January, showing that there continues to be an upward trend in the US economy.
“While there are increasing signs that the underlying trend of growth in the United States is improving, this upturn has yet to affect the broad trend of the Canadian economy,” said Philip Cross, author of the Composite Leading Index for The Conference Board of Canada.
There are signs of improvement in some of Canada’s export-related sectors, which are starting to pick up in line with the strengthening US economy. After three consecutive monthly declines, new orders for durable manufactured goods increased 1.7% in January.
Prices on the Toronto stock market improved for the fifth straight month, despite steady declines in commodity prices (as measured by the Bank of Canada index).
Other parts of the domestic economy remained sluggish. With new construction hamstrung by poor weather, the housing index fell 0.4%. Claims for employment insurance dipped for a fifth straight month, indicative of a slowly improving labour market.
This is the second release of the Composite Leading Index, which sums up the performance of ten components that track the short-term course of the economy. The newest of the Conference Board’s macroeconomic indicators, it signals changes in the business cycle (periods of faster and slower economic growth) approximately six or seven months in the future. It is published monthly.