Canada’s PMI Gains 2012.03.06

Ivey reported Tuesday the purchasing manager index (PMI) for Canada rose 2.4 points in February to 66.5 from January’s 64.1 although decreasing 4.3 points from February the previous year (2011) at 70.8. An index greater than 50 indicates growth while an index less than 50 indicates contraction. The monthly increase was greater than economists’ expectations of a monthly decrease to 62.0. Furthermore, analysts expect Canada’s growth to advance at a moderate pace as the United State’s economy improves and fear wanes over fiscal insecurities in Europe.

Additionally, the three of the four PMI sub-indexes also saw increases. The employment index rose 3.6 points to 58.8 in February while the previous month came in at 55.2. On the other hand, inventories lowered 2.1 points from January’s 57.0 settling at 54.9 in February. Yet, deliveries heightened in February to 48.8 from 41.1 in January. As well, prices went higher in February to 73.1 from 65.0 in January.

In other news, Lloyds Banking Group reported housing prices in the United Kingdom lowered 0.5% in February after January’s increased 0.6%, per the Halifax house price index (HPI). Additionally, the three months to February showed a decrease of 1.1% compared to the previous three months. As well, the three months to February were 1.9% lower than the prior year’s (2011). Nationally, housing price averages came in around £160,118 in February similar to last year’s £160,393 (April 2011) spring prices. In addition to this, the proportion of first-time home buyers to all home purchasers rose in February. Analysts expect lowering inflation will soften some of the pressure on household incomes.

Eugene Ross, Analyst

Admiral Markets

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