The economy showed strength last month as the leading indicator rose 0.5%, Statistics Canada said today.

The statistical agency said growth, which had been powered by household spending, has begun to shift to investment demand.

Of the 10 components in the leading indicator index, only housing showed a decline in October.

New orders for durable goods saw the largest increase since January. Primary metals, metal fabricating, machinery and transportation equipment all hit highs for the year in response to the investment boom in the oil patch.

These orders began to influence shipments, which turned up after trending down over the previous five months.

The average work week held on to recent gains and the investment surge also continued to boost employment in business services.

Household demand softened, especially in central and eastern Canada, where soaring gas prices bit hard.

Vehicle sales in these areas tumbled, slowing the growth of durable goods sales.

The U.S. leading indicator eked out only a 0.1% gain, partly slowed by the effects of Hurricane Katrina.