Canada PMI January 2018


Canada: Ivey PMI falls for third consecutive month in January

February 6, 2018

The Ivey Purchasing Managers Index (PMI), prepared by the Richard Ivey School of Business, declined for the third consecutive month in January. The seasonally-adjusted index dropped to 55.2 points in January from 60.4 points in December, disappointing market analysts’ who had expected a rise to 61.0 points. Despite January’s decline, the index remained above the 50-point threshold that separates expansion from contraction of economic activity among Canadian firms.

January’s Ivey PMI data pointed to a slowdown in the growth of purchasing activity, and the four other business-related indices compiled by Ivey provided a similarly tepid estimation of the economy’s recent performance and indicated a general deterioration since December. Inventories shot up in January, while suppliers were slower to deliver goods. Furthermore, prices kept increasing, rising at a faster pace compared to December. A positive sign, however, was that the employment index was broadly stable and remained above 50 points, indicating that the economy kept adding jobs in January at about the same pace as in December. Ivey’s employment index contrasted somewhat with Statistics Canada’s jobs report for January, which recorded sharp losses in part-time work and an uptick in the unemployment rate to 5.9%.

FocusEconomics Consensus Forecast panelists expect 2.2% growth in fixed investment in 2018, which is unchanged from last month’s forecast. For 2019, the panel expects fixed investment to expand 1.8%.

Author:, Economist

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Canada PMI Chart

Canada PMI January 2018

Note: Ivey Purchasing Managers’ Index. A reading above 50 points indicates an expansion in purchasing activity while a value below 50 points indicates a contraction.
Source: Richard Ivey School of Business and the Purchasing Management Association of Canada.

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