Markit, RBC launch Canadian factory index
Around the world, factory activity is considered a barometer of the economic health, frequently measured by a purchasing managers` index. Not so in Canada -- until now.
A Canadian manufacturing purchasing managers` index, or PMI, is being launched Thursday, compiled by the U.K. financial services company Markit and sponsored by the Royal Bank of Canada. For the first time, Canadian activity will be comparable with the likes of Germany, China, Brazil and 21 other countries or regions.
The Canadian PMI serves several purposes as an economic indicator: it measures the health of factory activity, generally considered a leading indicator of the economy. It gives a sense of future inflation trends and is widely used by central banks such as the Bank of England in thinking about monetary policy. And, importantly, it is timely -- released on the first business day of the month, ahead even of employment numbers.
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