The growth of the leading indicator continued to moderate, edging up 0.2% in August after increases of 0.3% in the previous two months, Statistics Canada reported on Wednesday.

These gains were less than half the progressions posted in March, April and May. Still, seven of the 10 components rose in August, up from five in July. And even though household spending softened, business spending remained strong and the weakness in manufacturing appeared to moderate.

Household spending, a bulwark of domestic demand in the first half of the year, weakened over the summer. The largest reversal was in the housing index, which fell 2.5% as a result of a sharp drop in housing starts and a levelling off of house sales. The slowdown in housing restrained the growth of furniture and appliance sales to their slowest increase (0.5%) so far this year. Sales of other durable goods also moderated, although vehicle sales rebounded in August.

Firms increasingly moved to the forefront in sustaining domestic spending. This was most evident in business services, where employment was boosted by rapid growth in Alberta and British Columbia in response to more investment. The stock market remained near a record level over the summer, buoyed by robust profits. Strong investment demand also played a major role in raising new orders.

The outlook for manufacturing improved slightly. New orders edged up 0.1% after back-to-back declines. Demand was particularly strong for metals, machinery and aerospace products. The average workweek stabilized, after large cuts earlier this year. The ratio of shipments to inventories also turned up, because inventories fell faster than shipments. The latter is consistent with weak export demand, and the U.S. leading indicator dipped for a second straight month.