| Actual | Previous | |
|---|---|---|
| Adjusted Index | 52.4 | 59.8 |
| Unadjusted Index | 51.7 | 61.6 |
Highlights
Canada's Ivey Purchasing Managers Index (PMI) came back down to 52.4 in October after rebounding to 59.8 in September, the highest level since June 2024.
Today's report points to a fading economic momentum, but expansion nonetheless. The reading confirms the Bank of Canada's expectation of"weak" economic growth in the second half of this year, after a 0.4 percent (1.6 percent annualized) contraction in the second quarter. Real GDP contracted 0.3 percent in August, with the advance estimate for September pointing to a partial 0.1 percent recovery, which would make for a 0.1 percent GDP increase in the third quarter.
In October, less than a third, 30.5 percent, of purchasing managers reported higher purchases, more than a 10-percentage point drop from 40.9 percent in September. By contrast, 27.1 percent reported lower purchases, up from 17.6 percent the previous month.
The inventories and supplier indices came down, to 51.7 from 56.4 and to 45.4 from 46.4, respectively.
The employment index, however, increased to 51.8 from 50.2, reaching its highest level since February of this year. This reading is particularly surprising in light of the results of the Bank of Canada's third quarter Business Outlook Survey, conducted between August 7 and September 3, and describing subdued hiring intentions. Most firms do not plan to increase the size of their workforce over the next 12 months, the survey said, although it added that the share of businesses planning to shed jobs was stable. The economy added 60,400 jobs in September, with estimates ranging from a 20,000 employment decline to a 15,000increase in October. The employment report is expected tomorrow.
The price index was also up in October, to 64.3 from 63.2 in September.
The unadjusted PMI index was down nearly 10 percentage points to 51.7 in October from 61.6 in September.
Today's report points to a fading economic momentum, but expansion nonetheless. The reading confirms the Bank of Canada's expectation of"weak" economic growth in the second half of this year, after a 0.4 percent (1.6 percent annualized) contraction in the second quarter. Real GDP contracted 0.3 percent in August, with the advance estimate for September pointing to a partial 0.1 percent recovery, which would make for a 0.1 percent GDP increase in the third quarter.
In October, less than a third, 30.5 percent, of purchasing managers reported higher purchases, more than a 10-percentage point drop from 40.9 percent in September. By contrast, 27.1 percent reported lower purchases, up from 17.6 percent the previous month.
The inventories and supplier indices came down, to 51.7 from 56.4 and to 45.4 from 46.4, respectively.
The employment index, however, increased to 51.8 from 50.2, reaching its highest level since February of this year. This reading is particularly surprising in light of the results of the Bank of Canada's third quarter Business Outlook Survey, conducted between August 7 and September 3, and describing subdued hiring intentions. Most firms do not plan to increase the size of their workforce over the next 12 months, the survey said, although it added that the share of businesses planning to shed jobs was stable. The economy added 60,400 jobs in September, with estimates ranging from a 20,000 employment decline to a 15,000increase in October. The employment report is expected tomorrow.
The price index was also up in October, to 64.3 from 63.2 in September.
The unadjusted PMI index was down nearly 10 percentage points to 51.7 in October from 61.6 in September.
Definition
The Ivey purchasing Managers' Index (PMI) measures purchasing activity as indicated by a panel of purchasing managers selected geographically and by sector of activity to match the Canadian economy as a whole. The PMI includes both the public and private sectors and is based on month-end data. Five categories are covered in the survey: purchases, employment, inventories, supplier deliveries and prices. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting).
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.
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.
