UPDATE 1-Manufacturing boosts Canada June leading indicator

* Manufacturing leads growth, housing retreats

* Increase is above market expectations (Adds details)

OTTAWA, July 16 (Reuters) - A gradual recovery in manufacturing pushed up Canada's composite leading indicator by 1.0 percent in June, outweighing the effects of a cooler housing market, Statistics Canada said on Friday.

Market players had predicted, on average, a gain of 0.7 percent. Statscan revised its figures for May and April to a gain of 1.1 percent in each month from the 0.9 percent increases it previously estimated.

"Growth again was concentrated in the manufacturing sector. Household spending and the stock market continued to moderate, after leading the initial upturn in mid-2009," the federal agency said in its report.

The manufacturing sector, which has had trouble dealing with the high Canadian dollar and weak U.S. markets, saw new orders for durable goods rise 2.3 percent for a fifth straight gain due to high demand for machinery and aerospace products.

Higher sales pushed the shipment to inventory ratio up, while the average manufacturing work week increased for the third month in a row.

The housing index retreated 1.9 percent, dragged down by existing home sales and to a lesser extent housing starts. (Reporting by Louise Egan, Editing by Chizu Nomiyama)