This is a post from Alex Carrick's blog that covers the Canadian construction industry.

Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

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Construction Industry Forecasts

Notes from Alex Carrick - May 18, 2011

Alex Carrick
Canada’s leading indicator index advanced strongly in April

Canada’s leading indicator index continued to advance strongly in April, according to Statistics Canada. The month-to-month gain was +0.8%, which was an acceleration from March’s +0.6%.

During Canada’s recession from late 2008 through to the mid-point of 2009, the leading indicator index declined in eight straight months. Since July 2009, however, it has increased by 0.4% or more in 21 of the past 22 months.

This is a level of performance stronger than in most of the good years leading up to the recession.

In the latest month, eight of the ten sub-components of the overall index rose.

The manufacturing sub-indices were particularly strong, with the average workweek in hours higher by 0.3%, new durables orders ahead by 0.5% and the shipments to inventory ratio up 0.2 points.

Better manufacturing sales came mainly from exports. On that score, the leading indicator for the U.S. economy (which is one of Canada’s 10 sub-indices) was +0.7% month to month. The U.S. leading indicator series is calculated by The Conference Board.

The financial side of the economy also did well. The Toronto Stock Exchange yielded a 1.5% gain and the narrowly-defined money supply increased 0.5%.

Business and personal services employment rose 0.4%.

Housing was mixed with the combined indicator for new home starts and resales declining 0.4%. Both segments of the residential market have been showing some moderation of late. But furniture and appliance sales were +0.4%.

In addition to the leading indicator index, several other recent stories have been turning the spotlight on Canada as an economy to be reckoned with.

Canadian banks, along with those in Singapore, dominated a recent Bloomberg News ranking of the world’s strongest banks.

Vancouver home prices have been shooting skyward due to demand from wealthy mainland Chinese investors. Only Hong Kong and Singapore hold similar appeal when it comes to newly-wealthy Asian entrepreneurs seeking to send their children abroad for schooling and to diversify their property holdings.

Also on the West coast, Canada’s forestry sector is getting a shot in the arm from Chinese demand for lumber. This is occurring to such an extent there is a backlog of cargo sitting in the Port of Vancouver waiting to be shipped across the Pacific.

On a national level, Canada’s major banks have submitted a bid to buy the Toronto Stock Exchange. This is a more generous counter-offer to the proposal made by the London Stock Exchange. The LSE is not expected to engage in a bidding war.

Due to the sordid and scandalous New York legal problems of Dominique Strauss-Kahn, a new leader is being sought to take over as head of the International Monetary Fund (IMF). Our own Mark Carney, Governor of the Bank of Canada, is being suggested as a possible replacement.

To be honest, this isn’t likely. On the one side, the Europeans will want to retain control of this prestigious position. A European has traditionally headed up the IMF while an American has been at the top of the World Bank. That man is currently Robert Zoellick.

Plus they’ll want their own man/woman in charge while the sovereign debt problems of Greece, Portugal and Ireland are still being sorted out. A woman may very well be chosen this time with Christine Lagarde, France’s Minister of Finance, as a strong candidate.

Ms. Lagarde was a particularly effective and reputable-seeming spokesperson in the recent documentary on the global financial crisis, entitled Inside Job. Many of her male colleagues from high positions in other governments did not comport themselves nearly so well.

At the same time, there’s a push being made by emerging nations to see stronger representation on international bodies that have a great deal of influence on their economies as well.

Nevertheless, it is a source of some pride that a Canadian’s name can be advanced and receive serious consideration. This is one of the payoffs from Canada’s financial sector surviving the global financial crisis in such fine form.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News. Mr. Carrick also has a lifestyle blog that can be reached by clicking here.


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Read Other Recent Alex Carrick Posts

05/14 - Economic Nuggets - May 15, 2012
05/11 - Canada Rode a Second Consecutive Month of Strong Job Gains in April
05/04 - U.S. Employment Rose by a Mediocre 115,000 in April
04/27 - U.S. GDP +2.2% in Q1 2012 and Alberta led Canadian Provinces in 2011
04/18 - U.S. Inflation Low in March; Canada’s Central Bank Looking to Raise Rates
04/12 - Canada’s Trade Surplus in February Declined but Business is Optimistic
04/03 - A Tale of Two Budgets
03/29 - A strong year for new construction investment intentions in 2012
03/21 - Leading Indicator Series Add to Good News about the U.S. and Canadian Economies
03/06 - Three key trends, more forays into high-tech and the importance for construction
02/29 - Two important sources of strength: share prices and non-residential construction
02/22 - Home resale market may be picking up in the U.S. while flattening in Canada
02/16 - Good news on U.S. housing and employment is positive for Canada as well
02/08 - Home starts and job levels diverge in Canada and the U.S.
02/03 - Canada’s labour market flat in January but U.S. on a roll
01/23 - Canada’s leading indicator series continued to charge ahead in December
01/12 - 2012 holds promise but there’s no denying the uncertainty (part 2)
01/11 - 2012 holds promise but there’s no denying the uncertainty (part 1)
01/04 - How stock prices have performed depends on the timing of the data points
12/22 - Canada stands firmly in the middle of the road as it enters 2012

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