The unadjusted Ivey PMI rose a sizeable 7.7 points to 63.3 in September, its highest reading since May. However, seasonal factors are quite strongly positive last month and adjusted for these the headline index fell 4.3 points to 53.7. This is still quite comfortably above the 50 growth threshold but also indicative of a clear deceleration in activity rates from August.
Within the adjusted results the employment sub-index edged 0.8 points higher to 57.1. This should point to a decent employment gain in Friday's labour market report although the monthly correlation between the two is not strong. Otherwise, delivery times were slightly slower than in August (49.8 after 48.2) while inventory unwinding was replaced by fresh accumulation (52.1 after 42.4). Finally prices (64.4 after 66.3) rose at a slightly slower rate than in mid-quarter.
Today's data make for an average seasonally adjusted third quarter PMI of 54.9, down from 58.8 in the previous period. Taken at face value this would imply a slowdown in economic activity although other indicators have suggested otherwise. At any rate, it certainly points to a recovery that, at best, is only sluggish recovery and likely weak enough to at least keep alive the possibility of another BoC interest rate cut further out.
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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