There is a mixed bag of economic data out this morning, with weaker building permits, but a huge jump in the Ivey Purchasing Managers Index.

The Ivey PMI, which measures business spending in Canada, surged to 67.4 in June, a huge leap from a 50.6 reading in May.

RBC Financial cautions that the series is volatile and has a short history, but it nevertheless notes, “the resoundingly positive answers to the question “Were your purchases last month in dollars higher, the same, or lower than the previous month” pushed the index to a 33-month high and somewhat offsets assertions that Canada is about to succumb to a U.S.-style decline.”

However, it also warns that the series is not seasonally adjusted and some components bear little relation to the actual economy. “The employment index, for example, rose to 60.7 from 56.5 in May but offers little guidance for Friday’s labour report because an unseasonally-adjusted number will generally always rise in early summer as students enter the job market.”

Details of the report were mixed, RBC reports. Inventories surged to their highest since June 1999, which RBC comments, “[is] only a good sign if the increase was planned”. Also, supplier deliveries rose to a 25-month high, indicating faster deliveries (and less congestion in the supply pipeline), while prices paid edged up. “In sum, this indicator argues for a steady Bank of Canada in the months ahead,’ it concludes.

In a separate release, Statistics Canada reported that the the value of building permits fell 2% from April to May, which was weaker than expectations.

According to StatsCan, institutional intentions plummeted and construction intentions for single-family homes hit a 17-month low. Builders took out $3.9 billion worth of building permits.

“However the details of this volatile series were more encouraging,” RBC says. “Residential permits, which make up about two-thirds of the total value of permits issued, rose 0.8% in May as builders continue to respond to strong housing demand. Multiple-unit projects generated the increase as permits for single-family homes fell for the fourth straight month. Non-residential permit issuance fell 6.2% as declines in permits for government and commercial projects offset an increase in industrial intentions.”

“Although signs of a slowdown are creeping into the data, Canada’s building sector is still performing strongly,” it says.