Friday, July 4, 2008

Purchasing managers remain optimistic

A report on the activities of purchasing managers suggests the Canadian economy is doing reasonably well, but also that prices are rising quickly.

Purchasing managers upped their buying in June from May, the Ivey Purchasing Managers Index (PMI) reported Friday.

Some of the rise may be due to higher prices, as the Ivey price index was at its highest level ever, the index website said.

"As a consequence, the Ivey PMI is undoubtedly higher than it should be given a more normal level of inflation," director Michiel Leenders said.

The PMI was at 69.6 at the end of June, up from 62.5 in May. The figure in June 2007 was 67.4.

PMIs are deemed to be a measure of sentiment in the economy; a figure above 50 shows managers are optimistic, while below 50 suggests purchases are slowing, a pessimistic indicator.

The Ivey index, sponsored by the Richard Ivey School of Business at the University of Western Ontario and the Purchasing Management Association of Canada, is based on responses from 175 people chosen to represent the whole economy.

The participants are asked one question: "Were your purchases last month in dollars higher, the same, or lower than the previous month?"

In June, 53.6 per cent said higher, 31.9 per cent the same and 14.5 per cent lower.

  • Managers worry more about inflation
  • Manufacturing sector shows some life
  • Royal Bank optimistic about economy
  • March retail sales post slim gain
  • Homeowners spent $19.7B on renovations in 2007