Philip CrossRecent upturn in growth comes from the housing sector that grew after five consecutive declines, writes Munk Senior Fellow Philip Cross in October 2017's MLI Leading Economic Indicator.

OTTAWA, ON (Dec. 1, 2017): Canada's economic growth increased in October.

The Macdonald-Laurier Institute’s Leading Economic Indicator, a tool designed to predict changes in the Canadian business cycle, rose by 0.4 percent in October.

The upturn in the index largely originated in the housing index, which jumped 1.1 percent after five consecutive declines.

“Housing demand is likely to pick up significantly before January 1,” says Munk Senior Fellow Philip Cross, the author of the LEI, “when more stringent regulations on mortgage lending take effect that will raise the cost of borrowing.”

Higher oil prices also gave a boost to commodity prices and the Toronto stock market. The manufacturing sector remained the major drag on growth

To learn more about the leading economic indicator, click here.

The leading index is designed to signal an upcoming turn in the business cycle, either from growth to recession or from recession to recovery, six months in advance, with an error rate of less than five percent. It does so by monitoring what businesses and households have actually committed to in terms of future spending and production in the most cyclically-sensitive sectors of the economy. It also incorporates global influences such as the direction of the US economy and the broad thrust of monetary policy.

The index is available on Bloomberg and is intended for journalists and analysts who follow the macro performance of the Canadian economy. Quarterly economic analyses by Cross, based on the results of the indicator, will appear on the MLI website.


Philip Cross is a Munk Senior Fellow with the Macdonald-Laurier Institute. He previously served as the Chief Economic Analyst for Statistics Canada, part of a 36-year career with the agency.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

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