All three of manufacturing’s leading indicators fell in March

Ottawa, ON — Statistics Canada reports that the composite leading index fell 1.3% in March 2009, following a 1.4% drop in the previous month. The contraction in the manufacturing sector intensified as widespread cutbacks were implemented in the auto industry early in the new year. This was offset by a marked slowdown in the fall of the housing and stock markets.

All three manufacturing indicators fell in unison. The sharpest decline was for new orders, down a record 10.3% due to falling demand for autos. Falling shipments also lowered the ratio of shipments to inventories. Preliminary data for February on the number of auto assemblies point to a rebound of over one-quarter of output.

The financial indicators continued to improve. The money supply remained the only component to expand. The stock market continued its downward trend, dropping 2.3% in March, following five straight declines averaging nearly 8% a month.

The rate of decline of the housing index also moderated to 4.3% in March from 7.7% in February. Both housing starts and existing home sales saw improvements after several months of retreat. Sales of other durable goods also posted a much lower rate of decline of 0.6%, as the rapid drop in auto sales late in 2008 began to level off early in the new year.