Date: September 21, 2010
Canadian Leading Indicators, August 2010 Results
Source: Statistics Canada
Link to Release: http://www.statcan.gc.ca/daily-quotidien/100922/dq100922b-eng.htm
Summary: The Canadian Composite Index of Leading Indicators generally points to the direction of economic growth two months in advance of Statistics Canada’s Gross Domestic Product (GDP) release. The Index increased by 0.5 per cent in August, up slightly from July’s 0.4 per cent rise. The manufacturing sector continued to show strength overall, driven by 5.2 per cent increase in orders for durable goods. Notable declines were in the housing component of the index, which dipped by four per cent, and housing-related index components such as furniture and appliance sales.
Analysis: The above average economic growth in the fourth quarter of 2009 and first quarter of 2010 was driven to a great degree by home sales and associated housing-related transactions. Record low interest rates spurred a record number of transactions in many metropolitan areas across the country, including the GTA. Consumer spending on large ticket items like homes and related goods and services was the Bank of Canada’s intent when it lowered interest rates. While we are experiencing a balancing out from the extremely strong housing market activity experienced through the first quarter of 2010, the leading indicator suggests that we will continue to see GDP growth reported by Statistics Canada in the second half of the year. This growth, however, will be more the result of private sector business investment, rather than consumer spending and housing investment. GDP growth for the remainder of 2010 will likely be below the long-term average.
Thursday, September 30, 2010
Source: Toronto Real Estate Board
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