WRAPUP 1-Economic data soft, but Canada seen on the mend

* Ivey purchasing managers index shows some expansion

* Building permits largely recoup losses from recession

* Both indicators weaker than expected

By Ka Yan Ng

TORONTO, Feb 4 (BestGrowthStock) – Canadian data for building
permits and purchasing activity were weaker than expected, but
both indicators showed growth from the previous month and added
to the view that the Canadian economy is healing.

Purchasing activity edged back into expansion territory in
January, according to the Ivey Purchasing Managers Index. The
index edged up to 50.8 in January from 48.4 in December, but
was slightly below market forecasts for a rise to 52.5.

A reading of 50.0 indicates that activity remained flat
from the preceding month, while a higher reading indicates an
increase and a lower reading reflects a decrease.

The Ivey index has shown a steady rebound since it hit its
lowest ever last January at 36.1, and Thursday’s number was
consistent with mild growth since the economy barely exited
recession in the third quarter.

The value of Canadian building permits rose by 2.4 percent
in December from November and ended the year having largely
recouped losses suffered during the recession, Statistics
Canada said. [ID:nN04233548]

The increase was slightly less than the 2.5 percent gain
forecast by market analysts surveyed by Reuters.

“Neither was a surprise. Both were maybe slightly below
what we had expected but both did show improvement from the
prior month’s level.” said Doug Porter, deputy chief economist
at BMO Capital Markets.

“From a broader perspective it very much keeps the recovery
story on track.”

Details of the report showed commercial permits drove the
monthly gain, while the residential sector, a leader in the
economic recovery, fell 0.1 percent to snap a nine-month run of

“I’m not that worried about (the fall in residential
permits). We know that home sales are still on a tear and
housing starts have picked up very nicely. The pullback was
quite tiny compared to the massive runup they’ve had in the
past year,” said Porter.

The Canadian dollar weakened after the Ivey figures were
released, though the slide came amid a weaker tone to the
overall market as risk sentiment eroded on renewed concern
about the financial health health of some eurozone countries.

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(Reporting by Ka Yan Ng; editing by Rob Wilson)

WRAPUP 1-Economic data soft, but Canada seen on the mend