Leading indicators for March 2010

Statscan - The composite leading index rose 1.0% in March, matching its average monthly increase since July 2009. However, the sources of growth continued to shift away from housing to other sectors of consumer demand and manufacturing.

The housing index rose by 0.2%, its smallest increase since its current upturn began in the spring of 2009. At its peak last summer, the housing index was rising over 5% a month. The recent slowdown originated in a retreat of existing home sales from their record posted late in 2009. Housing starts continued to increase.

Elsewhere, consumer spending was mixed. Furniture and appliance sale rose 1.3%, their largest advance since June 2006. Spending on other durable goods declined 0.5% after eight months of strong growth. Services employment increased 0.6% with strength evident in both the personal and business sectors.

Manufacturing demand continued to recover. New orders rose 3.2%, their third increase in four months. The increased ratio of shipments to inventories was driven mostly by higher sales. Export industries have led the rebound in sales, as demand for capital goods continued to languish. Factories remained restrained in hiring, and the average workweek fell again. The outlook for export demand was buoyed by further gains in the leading indicator for the United States.