* Ivey PMI seasonally adjusted index rises to 52.8 from 47.5
* Analysts expected adjusted reading of 49.5
* Positive reading follows November dip
* Employment falls to 49.2 from 55.1
By Alastair Sharp
TORONTO, Jan 7 Purchasing activity in Canada
rose modestly in December, according to Ivey Purchasing Managers
Index data released on Monday, but the reading failed to impress
economists as Canada's economy struggles to grow.
The seasonally adjusted index rose to 52.8 in December from
47.5 in November. Analysts polled by Reuters had expected a
reading of 49.5.
That was a modest uptick to close out the fourth quarter,
but coupled with falls in Ivey's employment, inventories and
prices data, painted a less than rosy economic picture.
"Overall, if you look at the sub-indices, the results are
not that impressive, especially the employment number, which
went below 50 for the first time in seven months," said Krishen
Rangasamy, a senior economist at National Bank Financial in
The Ivey employment index fell to 49.2, its lowest reading
since May last year, from 55.1 in the previous month.
A reading below 50 on the index data indicates that the pace
of activity fell from the previous month.
Statistics Canada surprised investors last week with a
robust jobs report for December that was at odds with other
figures pointing to sluggish growth.
The seasonally unadjusted Ivey PMI index dropped to 43.1
from 46.4, marking its lowest point since January 2011.
The weakness was in line with the RBC Canadian Manufacturing
PMI report, which last week showed Canadian manufacturing growth
stuck at a two-year low.
The composite leading indicator for Canada rose 0.1 percent
in November, slowing from October on a housing market downturn
and weak manufacturing as the economy hits a soft patch.
Statscan said on Dec. 21 that the economy grew just 0.1
percent in October. The Bank of Canada's latest forecast said
fourth-quarter growth would be 2.5 percent annualized, although
that estimate now looks very optimistic.
National's Rangasamy said GDP would likely not reach 2
percent in the fourth quarter. "The signals are that growth was
pretty slow," he said.