Canada's economy barely weathers January storms

OTTAWA, Feb. 28, 2014 /CNW/ - The Conference Board of Canada's Composite Leading Index increased 0.2 percent in January. A slowdown from the previous two months, the January index suggests that the upturn in the U.S. 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 U.S. Leading Indicator, produced by The Conference Board Inc., posted a 0.5 per cent gain in January, showing that there continues to be an upward trend in the American 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.

HIGHLIGHTS

• The Canadian index increased by 0.2 per cent in January, a slowdown from gains of 0.3 per cent in December and 0.4 per cent in November.
• Canadian export-related sectors are starting to pick up in line with the growth in the U.S. economy.
• The domestic economy in Canada remains sluggish.

There are signs of improvement in some of Canada's export-related sectors, which are starting to pick up in line with the strengthening U.S. economy. After three consecutive monthly declines, new orders for durable manufactured goods increased 1.7 per cent 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 per cent. 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 and available to subscribers of the Conference Board's e-library.

About the Author
Philip Cross spent 36 years at Statistics Canada specializing in macroeconomics. He was appointed Chief Economic Analyst in 2008 and was responsible for ensuring quality and coherence of all major economic statistics. During his career, he also wrote the "Current Economic Conditions" section of the Canadian Economic Observer, which provides Statistics Canada's view of the economy.

SOURCE: Conference Board of Canada

Brent Dowdall, Media Relations, Tel.: [phone] ext. 448
E-mail: [email protected]