Canada Aug Ivey PMI Dwn to 56.3;Business Confidence At 2Y High

By Yali N'Diaye

     OTTAWA (MNI) - The Canadian Ivey Purchasing Managers Index declined 3.7

points to 56.3 in August, still indicative of economic expansion, and consistent

with a decrease of the price index to 59.9 from 69.2, data from the Richard Ivey

School of Business showed Thursday.

     Meanwhile, the Conference Board of Canada reported that businesses'

optimism about investment and their own financial conditions reached a two-year

high in the second quarter. The business confidence index rose for the third

consecutive quarter "following persistent weakness dating back to the second

half of 2015," reaching 104.2, with three quarters of firms planning to increase

investment spending over the next six months.

     "Although uncertainty regarding the outcome of trade negotiations with the

U.S. might still be discouraging some firms from investing, current survey data

suggest that perceived trade risk is not the limiting factor it once was for

Canadian firms," the Conference Board said.

     Confidence is also showing through the Ivey PMI's employment index, which

rose 3.3 points to 55.9, with 28.4% of respondents reporting higher employment

and 56.8% reporting no change. The employment index posted its third consecutive

increase and the largest since October 2016.

     Statistics Canada will publish its August Labor Force Survey on Friday at

8:30 am ET, and analysts in a MNI expect employment to increase a further 15,000

in August, with the unemployment rate remaining at 6.3%.

     Elsewhere, the Ivey PMI inventories index rose to 57.1 from 55.8, and the

supplier deliveries index rose to 47.6 from 46.2.

     On an unadjusted basis, the Ivey PMI rose to 56.8 from 52.9.

     The Canadian Ivey PMI, unlike that produced by the U.S. Institute for

Supply Management, is based on end-of-month data and covers the complete

Canadian economy, including the public and private sectors. It reflects the

value change of firms' purchases.

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

[TOPICS: MACDS$,M$C$$$]