Two PMIs, Labor Force Survey, Commodity Trading By

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By Ketki Saxena– Last week, Canadian Economics included little, but key data.

The week started with the Markit Canada Manufacturing Purchasing Managers Index. Production levels and new orders rose sharply, but backlogs grew, impacted by supply chain issues. Pricing pressures have eased from the previous month, but continue to weigh on the trade outlook.

A second PMI index has been released: the Ivey Purchasing Managers Index for March, a key benchmark of economic activity in Canada. The index fell from a record low in March, but economic activity still increased during the month and remains well above the April 2021 level.

Another key data was Canada’s international securities trade, which saw Canadian imports and exports hit record highs, boosted by energy products.

The week also included the Labor Force Survey released by Statistics Canada, covering the entire Canadian labor force beyond wage employment. Employment remains high, unemployment low and hourly wages have increased at half the rate of inflation.

Here’s this week’s recap from Canadian Econ:

  • Markit Canada Manufacturing PMI: The PMI fell to 56.2 in April 2022 from an all-time high of 58.9 in March, but still marked a 22nd consecutive month of expansion. Production levels have risen sharply, mainly for producers of consumer goods. New orders saw robust growth in new orders. Backlogs have also increased sharply due to shortages of materials, trucks and skilled workers. Input price inflation has moderated since the peak in March, but businesses remain under pressure due to high cost pressures and uncertainty due to the geopolitical environment. The source:

  • Canadian international merchandise trade: Canada’s merchandise trade increased significantly in March, with both imports and exports reaching record highs. After rising 4.8% in February, imports jumped another 7.7% in March. Meanwhile, exports rose 6.3%, with energy products contributing more than half of the increase. As a result, Canada’s merchandise trade surplus with the world narrowed from $3.1 billion in February to $2.5 billion in March. Imports of energy products posted strong gains in March, up 26.3%, boosted by higher imports of oil and bitumen (+39.9%). Exports of energy products rose 12.8% to a record high of $17.9 billion in March, accounting for 28.2% of total exports. Exports of crude oil (+14.8%) contributed the most to growth in March.

  • Labor Force Survey: Employment was little changed in April. The employment rate remained unchanged at 61.9%, while the unemployment rate fell 0.1 percentage point to 5.2%. The total number of hours worked fell 1.9% in April. The average hourly wage increased by 3.3% (+$0.99 to $31.06) year over year. By sector, employment increases in professional, scientific and technical services and in public administration were offset by declines in construction and retail trade. On a demographic basis, employment gains among women in the core age group 25 to 54 were offset by a decline among men in the core age group.

  • IVEY Purchasing Managers Index: Canadian economic activity grew at a slower pace in April. On a seasonally adjusted basis, the index fell to 66.3 in April from a record high of 74.2 in March, but was still above the April 2021 figure of 60.6 amid the pandemic. A reading above 50 indicates increased activity, while a reading below 50 represents contraction. On an unadjusted basis, the PMI fell slightly to 68.0 from 68.4.

All currencies unless otherwise specified.