Purchasing activity up in February
The pace of purchasing activity in the Canadian economy rose unexpectedly in February from the month before, notching its fourth consecutive monthly gain, according to Ivey Purchasing Managers Index figures released on Tuesday.
The data showed the seasonally adjusted index rose to 66.5 last month from 64.1 in January. Analysts polled by Reuters had forecasts a reading of 62.
On an unadjusted basis, the index rose to 66.0 from 55.7.
A reading above 50 implies that activity expanded from the previous month.
“While the Ivey PMI tends to have a poor track record in capturing the cyclical swings in economic growth, today’s print is still consistent with our broader macro view,” Mazen Issa, Canada macro strategist at TD Securities, said in a research note.
“The Canadian growth profile is expected to expand at a moderate pace in this year, owing to better U.S. economic momentum and faded downside risks associated with the European debt crisis.”
The data further boosted hopes that economic activity in the first quarter could speed up after growth slowed markedly in the final quarter of 2011.
Jonathan Basile, director of economics at Credit Suisse, also noted that the headline index rose to the highest level since Mar 2011 and marked the longest gaining streak since the spring/summer of 2008.
The Ivey employment index advanced to 58.8 in February, from 55.2 in January.
“Despite the uneven pattern the past few months, the employment index has stepped up noticeably from soft readings last fall,” Basile said in a note to clients. “The Q1-to-date average (57.0 through Jan/Feb) is the highest since Q4 2007.”
(Reporting By Claire Sibonney; Editing by Jeffrey Hodgson and Rob Wilson)