Canada facing uncertain economic headwinds: MLI Leading Economic Indicator May 2017

Philip Cross

Philip CrossThe Macdonald-Laurier Institute’s Leading Economic Indicator reveals a slowdown for the Canadian economy in May 2017

OTTAWA, July 5, 2017 – The Macdonald-Laurier Institute’s Leading Economic Indicator for May 2017 is pointing towards a slowdown in the Canadian economy.

The composite leading index slowed to a 0.1 percent gain in May, down from 0.4 percent in April and a peak rate of increase of 0.8 percent in December 2016.

The deceleration points to the unsustainability of GDP growth in Canada so far this year, writes LEI author Philip Cross.

“The slowdown reflects a number of headwinds for growth in Canada, notably a downturn in the housing market and a deceleration for commodity prices,” writes Cross.

To learn more about the leading economic indicator, click here.

The leading index is designed to signal an upcoming turn in the business cycle, either from growth to recession or from recession to recovery, six months in advance, with an error rate of less than five percent. It does so by monitoring what businesses and households have actually committed to in terms of future spending and production in the most cyclically-sensitive sectors of the economy. It also incorporates global influences such as the direction of the US economy and the broad thrust of monetary policy.

The index is available on Bloomberg and is intended for journalists and analysts who follow the macro performance of the Canadian economy. Quarterly economic analyses by Cross, based on the results of the indicator, will appear on the MLI website.


Philip Cross is a Munk Senior Fellow with the Macdonald-Laurier Institute. He previously served as the Chief Economic Analyst for Statistics Canada, part of a 36-year career with the agency.

The Macdonald-Laurier Institute is the only non-partisan, independent national public policy think tank in Ottawa focusing on the full range of issues that fall under the jurisdiction of the federal government.

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