Slow Start to a Light Data Week in Canada
Slow Start to a Light Data Week in Canada
The only economic data release from now until Thursday is today’s new house price index for March. A moderating trend in the sales-to-new-listings ratio, an indication of the supply/demand balance in the housing market, informs our forecast calling for slower growth in the new house price index (NHPI). On a year-over-year basis, the index likely increased 6.1%, down from 6.3% in February and the 7.8% rate averaged in 2007. Although slowing, a 6.1% rate of house price appreciation is still relatively firm and easily outpaces the 1.4% CPI inflation rate seen in March.
Manufacturing data will be released on Thursday and March car sales on Friday. Manufacturing sales likely declined 0.7% in March. Furthermore, information provided to Statistics Canada has indicated a significant downturn in motor vehicle activity in March due to a labour dispute at a major parts supplier. Higher industrial prices (the industrial product price index was up 1.7% in the month) will mitigate the decline somewhat. Our forecast calls for sales levels a full 6.2% lower relative to a year-ago, highlighting that the sector is facing painful problems owing to a struggling U.S. economy and a lofty loonie. However, not all industries have suffered as high commodity prices have boosted sales of energy and primary metals products.
Statistics Canada has indicated that new motor vehicle sales were “relatively unchanged” in March. Our estimate sees them being up a slight 0.1%, which would point to a very modest gain in retail sales in the month. Motor vehicle sales growth has been solid thus far in 2008, averaging 10% year-over-year growth as sales in the sector have been boosted by significant price discounts and healthy employment growth.
Heavy economic data week in the United States
The economic data calendar this week in the United States is relatively heavy. Activity reports include retail sales for April tomorrow, industrial production/capacity utilization for April, the New York Empire State manufacturing survey and the Philadelphia Fed index for May on Wednesday, and housing starts for April and the preliminary Michigan consumer sentiment index for May on Friday. On the price side, the trade price indices for April will be released on Tuesday and consumer prices for April on Wednesday.
RBC Financial Group
http://www.rbc.com
The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.
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