OTTAWA, ON (March 3, 2020): With growing warning signs in the global economy, the Macdonald-Laurier Institute’s latest Leading Economic Indicator (LEI) update continues to project a slow growth trajectory for Canada’s economy. This latest update reflects the first LEI data of the new year.
The LEI rose by 0.5 percent in January, a slight improvement over December’s 0.4 percent gain. Comprising of ten components, the LEI is a tool designed to predict Canada’s future economy growth and track changes within Canada’s business cycle.
LEI author and MLI Munk Senior Fellow Phillip Cross noted that the stock markets led January’s increase of the LEI, which buoyed Canada’s economy as concerns mounted regarding the COVID-19 (or, coronavirus) outbreak. Additionally, Canada’s manufacturing sector showed promising gains reflected by a strengthening US economy.
“January’s numbers are modest, though positive,” explains Cross. “The economy appears to have started the new decade on a relatively somewhat good note.”
However, Canada’s economy is still at risk despite the marginal gains and improving underlying trend reflected in December’s GDP. Cross warns that “other factors, such as continuing protests and rail blockades and turbulence in the global markets, could easily derail Canada’s GDP and economic growth in the near future.”
“Despite a positive trend, we will have to wait and see what the true impact of rail blockades and the coronavirus are on Canadian and global markets, respectively.”
To learn more about the leading economic indicator, click here.
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