Canada's Ivey PMI rises to two-year high as purchasing activity accelerates

Canadian purchasing activity expanded at its strongest pace in more than two years in July, Ivey Purchasing Managers Index (PMI) data showed on Friday, providing additional evidence that Canada's economy is recovering from the coronavirus crisis.

The seasonally adjusted PMI rose to 68.5 from 58.2 in June. That was its highest level since April 2018 and surpassed analysts' expectations for 57.5.

"It is consistent with what we have seen in other indicators that have started to rebound from the pandemic lows," said Josh Nye, a senior economist at Royal Bank of Canada.

In April, when efforts to contain the coronavirus crisis halted business activity across the country, the index hit a record low of 22.8.

The Ivey PMI measures the month to month variation in economic activity as indicated by a panel of purchasing managers from across Canada. A reading above 50 indicates an increase in the pace of activity.

The gauge of employment rose to an adjusted 57.6 from 52.8 in June, while the prices index climbed to 60.5 from 56.4.

The unadjusted PMI rose to 65.2 from 62.9 in June.

By Fergal Smith