Manufacturing showed solid growth in June
Ottawa, ON -- Statistics Canada's leading index rose by 0.3% in June 2005, the same increase as in May. Domestic de...
Ottawa, ON — Statistics Canada’s leading index rose by 0.3% in June 2005, the same increase as in May. Domestic demand continued to strengthen, boosted by an upturn in housing in June.
Six of the 10 components advanced, one less than in May as manufacturing lost some of its recent strength. Overall, three components fell while one was unchanged. The US leading indicator continued to slump, although its economy remained strong. Without the drop in the US index, Canada’s leading indicator would have risen 0.6 %.
The growth of new orders for manufacturing was interrupted by a slump for transportation equipment, especially the volatile aerospace section. Excluding this industry, new orders remained close to the high set in January.
Another measure of the solid underlying trend in manufacturing is that its demand for labour held onto the gain made in May. Moreover, capacity utilization in the first quarter was at its highest level since 1987, with several investment-related industries either setting new records (notably machinery and non-metallic minerals) or approaching them (lumber and fabricated metal).
The US leading indicator slumped anew with a 0.3% drop. It has fallen steadily over the past year, largely because of the rising yield curve. Users should be aware that the US Conference Board next month will revise its calculation of the yield curve, to correct for the exaggerated impact it has had on the overall US index.