TORONTO, Oct. 16, 2020 /CNW/ - BMO's Canadian Business Activity Index rose 2.6 per cent in August, and is on pace for a 1.7 per cent gain in September, according to BMO Economics.
"This would mark five consecutive months of growth from the pandemic low set in April, leaving the index 3 per cent below February's peak," said Robert Kavcic, Senior Economist, BMO Capital Markets. "Looking at it another way, about 87 per cent of the economic hole caused by the pandemic has been filled back up."
Almost all indicators that make up the index continued to support the rebound in August. Hours worked posted another solid 2.9 per cent gain as the job market recovery progresses. The upside-surprise in housing continued, with sales and starts both rising strongly in August, though momentum began to ebb in September. But, manufacturing sales fell after a strong run (we await August readings on wholesale and retail trade). Sentiment measures from the CFIB and equity market remained supportive, but business credit growth was soft again in August.
"The Canadian economic recovery continues, with business activity improving again in August," noted Mr. Kavcic. "But, momentum is fading, as suggested by some of the early September data, and we continue to believe the task of filling the remaining COVID hole will be much, much tougher than it was to this point. That is, some industries are still a long way from returning to any semblance of normal, while a second wave of cases is prompting some localized restrictions of activity as we head deeper into the fall."
The BMO BAI is compiled from ten monthly indicators, with supporting information from Statistics Canada's preliminary estimates of a few monthly indicators and high-frequency data on retail mobility and internal credit card transactions.
Today's BMO BAI report can be found at
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