Sluggish housing sector continues to curtail economic growth in first quarter, says Philip Cross, author of MLI’s Leading Economic Indicator.
OTTAWA, ON (April 3, 2018): The Macdonald-Laurier Institute’s Leading Economic Indicator, a tool designed to predict changes in the Canadian business cycle, increased 0.2 percent in February after gains of 0.3 percent in January and 0.5 percent in December.
Five of the ten components increased, four declined and one was unchanged.
“Most of the slowdown over the last two months originated in the housing index,” says Munk Senior Fellow Philip Cross, the author of the LEI, “
The housing index fell 0.3 percent in January and another 0.8 percent in February as existing home sales fell sharply. Housing had soared 3.1 percent in December as home-buyers rushed to close deals before new regulations on mortgage lending took effect.
As Cross notes, “Lower housing is likely to curtail GDP growth in the first quarter after a slowdown in the second half of 2017.”
The Bloomberg index of consumer sentiment stalled in January and February after a spike in December. The leading index for the United States posted another robust increase, and this was reflected in modest gains for commodity prices and manufacturing demand in Canada.
To learn more about the leading economic indicator, click here.
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