CA: Ivey Purchasing Managers' Index


Thu Nov 05 09:00:00 CST 2015

Actual Previous
Index Level 52.3 63.3

Highlights
The unadjusted Ivey PMI fell sharply in October. At 52.3 the headline index was some 11 points short of its September level and at a 3-month low. It was also nearly 2 points below its reading a year ago. However, seasonal factors are very significant in October and adjusted for these the PMI was 53.1, just 0.6 points shy of the previous period's outturn.

Within the adjusted results the employment sub-index weighed in at 48.3, a hefty drop from September's 57.1 and back below the key 50 expansion threshold. Elsewhere, business inventories (46.6) were unwound after a short-lived period of accumulation last time while delivery times (51.9) were faster for the first time in 2015. Lastly prices (61.8) continued to rise but at a slower rate than at quarter-end (64.4).

One of the first looks at the economy in October makes for less than sparkling reading. In particular, taken at face value the sub-50 employment measure suggests that tomorrow's October labour force will be soft (as expected) although the monthly correlation between the two is not good. Otherwise there is little here to excite financial markets with both growth and inflation pressures apparently little changed from September.

Definition
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.

Description
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.