A rally in the housing and equity markets in September contributed to a 1.1% increase in Canada's composite leading economic indicator index, according to data released by Statistics Canada Tuesday.
The index rose to 220.2 in September from 217.8 in August, due to a 4% increase in the TSX in September and a 4.1% increase in Canada's housing index, which rose for a fifth consecutive month. The housing index increase, however, spread from sales in existing homes to include housing starts in September, which posted their largest gains since March 2008.
The rally in housing demand was reflected in furniture and appliance sales, which leveled off after seven straight declines. Consumer spending on other durable goods also continued to expand (0.9%) as employment firmed up over the summer.
The primary drags to the overall index was a 2.7% decline in new orders of durable goods and a 0.4% decline in business and personal services employment.