The composite leading index, moderated to 0.6% in July as demand for household goods fell for the first time in six months, Statistics Canada said today. Business spending rose, taking up some of the slack.


The decline in the index followed 1% gains in May and June — the largest in two years.

“The recent strength in household demand and the U.S. leading indicator gave way to a firming of business spending,” the agency said. “The upturn in investment was reflected in new orders which, driven by capital goods, posted a ninth straight increase.”

The first gain in business services employment this year “was another reflection of the pickup of business spending.”

Eight of 10 components measured in the index increased, indicating broadly based growth.

However, the housing index slowed for the first time in six months. It slipped to 1.2% from 2.9%.

“Construction of multiple units fell after the number of vacant units rose in most major urban centres since the start of the year,” Statistics Canada said.

“The single-family housing market remained buoyant, with high levels of new construction, and vacancies near record lows. Existing home sales in the second quarter surpassed their previous record set in the third quarter of 2003.

“Elsewhere, the trend of durable goods sales continued upward, despite lower auto sales and the depressing impact of high gasoline prices on incomes.”

In the United States, growth of the leading indicator moderated to 0.2% from 0.4% as consumer confidence fell for the third straight month.

However U.S. firms spent more, resulting in a sharp rebound in Canadian exports, which posted their largest year-over-year increase since 2000.