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Macdonald-Laurier Institute

Ottawa think tank launches economic indicator to provide advance warning of economic changes

October 11, 2012
in Domestic Policy Program, Economic policy, Latest News, Leading Economic Indicator, Releases
Reading Time: 5 mins read
A A

Fills void left by cancellation of StatsCan measure

MEDIA RELEASE

La version française suit

OTTAWA, October 11, 2012 – With its new monthly Leading Economic Indicator series launched today, the Macdonald-Laurier Institute (MLI) will be providing unique and valuable insights into the future course of the Canadian economy — giving advance warning of recessions and upturns.

The MLI Indicator will provide policymakers, businesspeople, investors and ordinary Canadians as much as six months advance warning of significant changes in Canada’s economic performance and will do so with a high degree of reliability and accuracy, said Philip Cross, MLI Research and Editorial Coordinator.

The MLI Indicator fills the void left by the Statistics Canada Composite Leading Indicator, which the federal agency cancelled last May.

The new index will sum up performance of nine components that track developments in key sectors such as financial markets or manufacturing to signal upcoming changes in the business cycle – most notably recession or recovery.

The inaugural MLI Leading Economic Indicator rose 0.1% in August after four consecutive months of 0.2% gains. The slow, steady growth of this indicator suggests the Canadian economy will avert a downturn in 2012.

See MLI Leading Economic Indicator accompanying this release.

“The past year has highlighted the usefulness of leading indicators,” said Mr. Cross.

“Starting with the stalemate of the U.S. budget, then Europe’s slide into recession and a slowdown in Asia, there have been constant concerns and reports Canada’s economy would relapse into recession. The leading indicator showed a trend to slower growth, but no recession, something borne out by the data on output and employment.”

See backgrounder accompanying today’s release.

The new MLI Indicator retains six of the 10 components in the original Stats Can index – housing index, U.S. leading indicator, money supply, stock market, average workweek in manufacturing, and new orders for durable goods.

Dropped because they no longer reflect significant lead times are retail sales of furniture and appliances, retail sales of other durable goods, service sector employment and ratio of sales to inventory in manufacturing.

Added to the new index are commodity prices, employment insurance claims and spread between government and private-sector interest rates, to bring the total to nine components.

Altogether, these nine components cover all the major cyclical parts of the economy, including financial markets, the labour market, exports, housing, and manufacturing, Mr. Cross said.

“Predicting the economy is a lot like predicting the weather to most people,” Mr. Cross said. “If there is healthy growth, it is human nature to expect continued growth. But business cycles change just as the weather does.”

The next release date for the MLI Leading Indicator is Oct. 30 to revert to regular publication in the last week of every month.

The Macdonald-Laurier Institute is an independent non-partisan Ottawa-based national think tank devoted to the development of Canadian public policy.

For further information, contact:

Philip Cross
Research & Editorial Coordinator
Macdonald-Laurier Institute
613-482-8327 ext 106
philip.cross@macdonaldlaurier.ca

Tripti Saha
Communications Officer
Macdonald-Laurier Institute
613-482-8327 ext 105
tripti.saha@macdonaldlaurier.ca

-30-

 

Un institut d’études et de recherche d’Ottawa lance un indicateur précurseur de la conjoncture économique

Il prend le relais du programme récemment aboli de Statistique Canada

Ottawa, le 11 octobre 2012. – L’Institut Macdonald-Laurier (MLI) fait aujourd’hui le lancement de son nouvel indicateur économique avancé canadien. Ce nouvel indicateur mensuel est un outil unique et précieux pour anticiper l’activité économique future du Canada et prévoir l’arrivée et la fin des récessions.

L’indicateur MLI sera utile aux décideurs, aux gens d’affaires, aux investisseurs et au grand public, car il signale avec une avance de 6 mois les retournements de la conjoncture au Canada. Il le fera avec un degré élevé de fiabilité et d’exactitude, a déclaré Philip Cross, coordonnateur de la recherche et de la politique éditoriale à MLI.

L’indicateur MLI comble le vide laissé par l’abolition du programme de l’indicateur avancé de Statistique Canada en mai dernier.

Le nouvel indicateur résume la performance de neuf composantes qui retracent l’évolution à court terme de secteurs clés de l’économie, notamment les marchés financiers et la fabrication. Il sert ainsi à annoncer les changements imminents du cycle d’affaires, soit l’arrivée des récessions et des reprises.

La toute première parution révèle que l’indicateur économique avancé MLI a augmenté de 0,1 % en août, après quatre hausses mensuelles de 0,2 %. La croissance lente et régulière de cet indicateur suggère que économie canadienne évitera une récession en 2012.

Veuillez consulter L’indicateur économique avancé MLI qui accompagne le présent communiqué

« Les événements de l’année écoulée ont renouvelé l’intérêt de tels indicateurs avancés », a déclaré Philip Cross.

« Il y a eu l’impasse quant au budget américain, puis la descente de l’Europe dans une récession et enfin, le ralentissement en Asie, dans la crainte constante, appuyée par les reportages, que l’économie canadienne ne retombe en récession. L’indicateur a signalé un ralentissement de la croissance, mais jamais de récession, une tendance confirmée par les données sur la production et l’emploi. »

Veuillez consulter l’étude de fond qui accompagne le communiqué d’aujourd’hui

Le nouvel indicateur MLI retient six des dix composantes de l’indicateur de l’agence fédérale : l’indice du logement, l’indice avancé américain, l’offre de monnaie, le marché boursier, la durée hebdomadaire de travail dans la fabrication et les nouvelles commandes de biens durables.

Il laisse tomber les composantes qui n’avaient plus d’avances notables. Il s’agit des ventes de meubles et d’articles ménagers, des ventes d’autres biens durables, de l’emploi dans les services et du ratio des livraisons aux stocks dans la fabrication.

Les trois composantes ajoutées au nouvel indicateur MLI sont les prix des marchandises de base, les demandes d’assurance-emploi et le différentiel d’intérêt sur la dette entre les secteurs public et privé. L’indicateur MLI est donc constitué de neuf composantes.

Ensemble, ces neuf composantes saisissent tous les secteurs cycliques principaux de l’économie, ce qui comprend les marchés financiers, le marché du travail, les exportations, le logement et le secteur manufacturier, selon monsieur Cross.

« Pour la plupart des gens, prévoir l’économie, c’est un peu comme prévoir la météo », a déclaré monsieur Cross. « Ainsi, c’est naturel d’envisager, au sommet d’une expansion, que la croissance sera sans fin. Mais à un certain moment, le cycle économique change, tout comme les saisons. »

Une version actualisée de l’indicateur avancé MLI paraîtra le mardi 30 octobre. L’indicateur paraîtra par la suite la dernière semaine de tous les mois.

L’Institut Macdonald-Laurier, situé à Ottawa, est indépendant et non partisan. Sa mission est d’appuyer le développement de politiques publiques adéquates et acceptables.

Renseignements :

Philip Cross
Coordonnateur de la recherche et de la politique éditoriale
Institut Macdonald-Laurier
613-482-8327 ext 106
philip.cross@macdonaldlaurier.ca

Tripti Saha
Communications Officer
Institut Macdonald-Laurier
613-482-8327 ext 105
tripti.saha@macdonaldlaurier.ca

-30-

Tags: Leading IndicatorPhilip Cross
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  • Home
  • About
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    • Tenth Anniversary
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  • Experts
    • Experts Directory
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    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
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      • Justice
      • Social issues
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    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
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  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
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      • Confederation Series
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