MNI DATA IMPACT: Canada Ivey PMI Up Despite Lower Price Index

By Yali N'Diaye

     OTTAWA (MNI) - The Canadian Ivey Purchasing Managers Index rebounded to

54.3 in March from 50.6 in February, with the gain suggesting stronger activity

and softer prices increases, data released Thursday by the Richard Ivey School

of Business showed.

     While the 3.7-point increase did not offset the cumulative decrease of 9.1

points over the previous two months, it was the largest advance since last

October.

     Here are some key features of the report:

     - The rebound in the unadjusted index was even stronger than the headline

figure, as the PMI climbed 8.7 points to to 57.6, returning above the 50.0 mark

for the first time since last November despite a 2.5-point drop in the price

index to 60.1.

     - The price index decreased 1.1 points to 58.7, suggesting the rebound in

the overall index was related to stronger activity. The index reflects the

change in the value of purchases and covers the whole economy, including the

public sector.  

     - Amid investors' fears of a recession after the Canadian yield curve

followed the U.S. with an inversion in late March, the question is whether the

rebound will prove sustainable and support the Bank of Canada's scenario of a

"temporary" soft patch.

     - Indeed, the 3-month average for the Ivey PMI index has been declining for

the past three months, and has been trending down since reaching a peak at 65.7

in June 2018. It declined to 53.2 in March.

     - The employment index increased in March, to 54.5, its highest level since

August 2018. Statistics Canada will release its Labor Force Survey on Friday,

and analysts in a MNI survey expect little change after a stronger-than-expected

55,900 employment gain in February. The unemployment rate is expected to remain

unchanged at 5.8%.

     - The supplier deliveries index decreased to 46.2 from 51.9, and the

inventories index fell to 47.8 from 52.2.

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

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