WRAPUP 1-New Canadian data flashes recovery signals

* Canada March building permits jump 12.2 pct

* Ivey PMI rises to 58.7 in April from 57.8 in March

By Ka Yan Ng

TORONTO, May 6 (BestGrowthStock) – Figures released on Thursday
provided more signs that economic recovery is taking root in
Canada with purchasing activity expanding in April at a faster
than expected pace, and building permits rising in March for
the first time in four months.

The Canadian dollar (CAD=D3: ) got a brief boost from each
set of data, but euro zone debt crisis fears kept it well short
of its recent highs.

The value of building permits leaped 12.2 percent in March
from February as both residential and nonresidential sectors
strengthened, Statistics Canada said.

The gain — well above the 0.9 percent increase predicted
by market traders — signaled Canada’s housing market is still
booming. The government has repeatedly said it is not worried
about a bubble developing, however.

In a note to clients, Scotia Capital economist Derek Holt
said the strong rebound in Canadian building permits
“embarrassed” the consensus market forecast and should lead to
strong housing starts figures.

“While gains were witnessed across all major sectors,
industrial and multifamily permits led the charge. With permit
volumes also putting in a strong showing on the month, this
bodes well for housing starts in April and May – and thus real
GDP,” he said.

The momentum is likely to carry through into summer, but
the autumn may present uncertainty as harmonized sales taxes
come into effect on July 1 in Ontario and British Columbia,
Holt added.

Residential building permits jumped 13.9 percent due to a
substantial gain in permits for multifamily dwellings,
particularly in Ontario and British Columbia.

Nonresidential permits were up 9.1 percent from February
due to rises in the industrial and institutional sectors.

Permits were up 38.9 percent from the near record lows of a
year earlier.

BUSINESS PURCHASES RISE

Business purchasing activity rose for a fourth straight
month in April, according to the Ivey Purchasing Managers
Index.

The index, the joint project of the Purchasing Management
Association of Canada and the Richard Ivey School of Business,
rose to 58.7 in April from 57.8 in March. Economists had
expected a reading of 56.0.

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 slowing or decrease.

The inventories, supplier deliveries, and prices components
of the index all showed a monthly decline.

But the employment subindex ticked higher to 54 in April
from 51.6 in March, raising the possibility that Friday’s
Canadian jobs data for April will offer a solid reading.

The median forecast of analysts is for a net gain of 25,000
jobs in the month, following a modest gain in March of 17,900.
The unemployment rate is expected to be unchanged at 8.2
percent. [ID:nN30250039]

Investing Basics

($1=$1.03 Canadian)
(Additional reporting by David Ljunggren in Ottawa; editing by
Peter Galloway)

WRAPUP 1-New Canadian data flashes recovery signals