Weakness in housing and financial sectors suggests economic slowdown will continue into 2018, says Philip Cross, author of MLI’s Leading Economic Indicator.
OTTAWA, ON (May 2, 2018): The Macdonald-Laurier Institute’s Leading Economic Indicator, a tool designed to predict changes in the Canadian business cycle, edged up by 0.1 percent in March. This continues its slowdown from a brief spurt of housing-related growth at the end of 2017.
Five of the ten components fell, one was unchanged and four increased.
“The slump in the housing index continued to deepen after new regulations on homebuyers took effect on January 1,” says Munk Senior Fellow Philip Cross, the author of the LEI,
Two of the three financial components also fell, with interest rate spreads deteriorating for the seventh straight month while the Toronto stock market retreated despite an upturn in commodity prices. The slump in the housing and stock markets helped depress the Bloomberg Nanos index of consumer attitudes for the second time in three months.
As Cross concludes, “The weakness in the housing and financial components, which have some of the longest lead times, suggests the slowdown in Canada’s economy the began in the middle of last year will continue well into 2018.”
To learn more about the leading economic indicator, click here.
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