The unadjusted Ivey PMI fell 5.7 points to 59.5 in June, reversing more than half of May's 9.5 point jump but still yielding a fifth consecutive reading above the 50 expansion threshold. More significantly, the seasonally adjusted index declined 6.4 points at 55.9, again comfortably above the 50 level but also a 3-month low.
Amongst the seasonally adjusted sub-indices employment dipped to 50.7 from 51.8. This makes for some downside side risk to Friday's labour market report. Elsewhere, delivery times (48.8 after 45.6) continued to slow, albeit less markedly than in May, while inventories (48.9 after 59.5) saw their first outright decline since February. Lastly, prices (59.4 after 64.4) again rose but more slowly than in the previous month.
Taken at face value, the latest survey points to a solid enough end to the second quarter by the Canadian economy. Indeed, over the period as a whole the average adjusted PMI was a healthy 58.8, a sharp improvement versus its first quarter mean (47.7) That said, the PMI was far too optimistic about April (adjusted reading 58.2) when real GDP contracted 0.1 percent on the month so the June results need to be treated with care.
The Ivey Purchasing Managers Index measures month to month changes in dollars of purchases as indicated by a panel of purchasing managers from across Canada. The 175 participants in this survey have been carefully selected geographically and by sector of activity to match the Canadian economy as a whole. The index includes both the public and private sectors. Index panel members indicate whether their organizations activity is higher than the same as or lower than the previous month across the following five categories - purchases, employment, inventories, supplier deliveries and prices. The Ivey Purchasing Managers Index is sponsored by the Richard Ivey School of Business and the Purchasing Management Association of Canada.
The Ivey PMI is provided in two formats -- unadjusted and seasonally adjusted. The index shows responses to one question: "Were your purchases last month in dollars higher, the same, or lower than the previous month?" A figure above 50 shows an increase while below 50 shows a decrease.
The index measures the month to month variation in economic activity as indicated by a panel of purchasing managers. The index uses end of the month data and it covers all sections of Canada's economy. The PMI includes both the public and private sectors and is based on month end data Ivey PMI panel members indicate whether their organizations activity is higher than, the same as, or lower than the previous month across the following five categories: purchases, employment, inventories, supplier deliveries and prices.
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