The unadjusted Ivey PMI fell sharply in July. At 49.4 the headline index down 5.3 points versus its June outturn, below the 50 growth threshold and at its lowest level since the end of last year. However, seasonal factors are strongly negative last month and adjusted for these the PMI was up a healthy 5.3 points at 57.0, its best reading since January.
Within the adjusted results, the employment sub-index (59.5 after 52.5) incorrectly signalled a sizeable gain in July payrolls (see today's employment report) while suppliers' delivery times (44.7 after 47.3) lengthened again and more quickly than in June. Meantime, business inventories (55.4 after 55.1) accumulated at much the same pace as in the previous month while prices (57.5 after 59.7) rose more slowly.
The new PMI survey suggests that the Canadian economy was picking up useful momentum last month. However, the labour force survey argues otherwise and financial markets are unlikely to be convinced without corroboration in the other hard economic data.
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.<br/><br/>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. <br/>