-Capital Economics
The pace of purchasing activity in Canada soared to the highest level in 14 months in May, adding to signs the economy is on the path of recovery, according to Ivey Purchasing Managers Index data. A measure of purchasing managers' activity jumped to 63.1 on a seasonally adjusted basis from a reading of 52.2 in April, surpassing the most optimistic of analysts' expectations. The seasonally unadjusted index surged to 70.8 compared with 50.9 in the prior month. A reading above 50 on an index indicates that the pace of activity increased from the previous month.
Among other related indexes, the jobless figure tumbled to 51.4 from 55.1, while a gauge of inventories increased to 58.3 up from 52.7. At the same time, the index measuring the supplier delivery rose to 49.8 from 49.5, and the price index rocketed to 63.2 from 58.7. Moreover, a report published earlier this month showed that the nation's economic output grew at a 2.5% annualized pace during the January-March period, accelerating from a 0.9% growth in the fourth quarter of 2012 and outpacing analysts' expectations of 2.3% expansion. During the latest monthly policy meeting a Governor of the Bank of Canada Mark Carney kept the main interest rate unchanged and noticed that tighter policy may be needed soon as the economic expansion progresses.
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