Canada's leading economic indicator falls 1.1% in February

Statistics Canada's composite leading index continued its southward march in February as nine of the 10 economic components that make up the measure lost ground in the month.

Statistics Canada said Monday that the index — which is made up of 10 different economic figures — dropped by 1.1 per cent in the second month of the year.

That weak showing followed a tumble of 0.9 per cent in January.

"The housing and stock markets continued to post the largest declines, while losses in manufacturing steepened as the auto industry began to implement extensive shutdowns at the turn of the year," said Canada's statistical agency in a statement.

Wide losses

The composite index is a figure in which the year 1992 equals 100 and is designed to show where the national economy is headed in future months.

February's reading stood at 221, down from September's 229.5.

In February, only money supply rose, which reflects the Bank of Canada's effort at stimulating the flagging national economy.

The housing sub-component fell eight per cent in the month and now stands equal to the level for the sector back in 1992.

The Toronto stock exchange came in as the second-biggest losing component in February, down 7.5 per cent. The TSX has dropped almost 35 per cent since September, according to Statistics Canada.

In addition, new orders for durable goods, items such as fridges and clothes washers, slid by 4.8 per cent, a further indication that worried consumers are not interested in buying big-ticket goods.

Some positive signs

Still, Canada's economy has shown signs of life, as January's retail sales figures, released Friday, rose by 1.9 per cent in the month. That jump was nearly twice as large as the one per cent economists had expected.

In addition, the Conference Board of Canada said Monday its index of consumer confidence rose 2.7 points in March to 71.5.

"On the question of future employment opportunities in their communities, sentiments did improve, and, for the sixth consecutive month, a greater share of respondents indicated that now was a good time to make a major purchase," said the Ottawa-based business think-tank.

The Conference Board's consumer sentiment index uses 2002 as its starting point, which implies that the current reading is nearly 30 per cent lower than the figure six years ago.

Finally, south of the border, the U.S. National Association of Realtors said Monday that sales of existing homes grew 5.1 per cent to an annual rate of 4.72 million last month, from 4.49 million units in January. It was the largest sales jump since July 2003.