OTTAWA, ON (September 10, 2018): The Macdonald-Laurier Institute’s Leading Economic Indicator (LEI), a tool designed to predict changes in the Canadian business cycle, increased by 0.1 percent in July. This represents a continuation of the slow growth that it has posted over the last four months.
While six of the ten components of the LEI underwent relatively marginal changes, the overall weakness in the index was primarily driven by declines in the housing and consumer confidence components.
According to LEI author and MLI Munk Senior Fellow Philip Cross, the declines on these two components are significant because they represent “the sectors which led higher growth late in 2017.”
These components reflect trends noted early this year, including steadily eroding consumer sentiment and a housing index which dropped for much of this year, excluding a 0.5 percent rebound in June.
Despite general sluggishness, there was some growth in July concentrated in commodity prices and the stock market. That being said, Cross says that the LEI is pointing to a disappointing end to 2018.
“Overall, the slow growth of the leading index suggests that the second-quarter gain in real GDP will not continue in the second half of the year.”
To learn more about the leading economic indicator, click here.
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