The unadjusted Ivey PMI rose 5.6 points to 55.6 last month, its seventh consecutive reading on or above the 50 growth threshold but still well short of the 65.2 and 59.5 highs posted in May and June respectively. Seasonal factors tend to be positive in August but even adjusted for these the PMI was 5.1 points firmer at 58.0, a 3-month high and, on paper, comfortably far enough above the 50 mark to signal a significant pick-up in economic activity.
Within the adjusted results, the employment sub-index rose from 49.1 in July to 56.3, its best posting since November 2013 but overly optimistic in terms of the actual employment data which showed total employment only 12,00 higher and manufacturing payrolls 3.200 lower. Elsewhere, inventories were unwound again (42.4 after 41.2) but less aggressively than in July and delivery times continued to lengthen (48.2 after 47.6). Lastly prices (66.3 after 61.7) climbed higher and more quickly than last time.
Last month's PMI paints a decidedly upbeat picture of economic activity and is certainly more positive than the August labour force survey. At least at the margin, it should help to dampen speculation about BoC policy being eased again this year.
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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