TORONTO, Sept. 18, 2020 /CNW/ - The BMO Business
Activity Index (BMO BAI) from BMO Economics, which tracks monthly
business activity with information on jobs, spending, sentiment and
other indicators, rose 5.0 per cent in July, and is on pace for a
2.7 per cent gain in August. That would mark four consecutive
months of strong growth from the pandemic low set in April, leaving
the index 4.7 per cent below February's peak.
"Activity by this measure had sunk as much 24 per cent at one
point," said Robert Kavcic, Senior
Economist, BMO Capital Markets. "Thinking of it another way, about
80 per cent of the economic hole caused by the pandemic has been
filled back up."
Almost all indicators that make up the index continued to
support the rebound in July and August. Hours worked posted solid
gains as the job market recovers. The upside-surprise in housing
has continued, with sales and starts both rising strongly in July
and August. Meanwhile, sales measures in retail, wholesale and
manufacturing are all still pushing higher. Sentiment measures from
the Canadian Federation of Independent Business and equity market
remain supportive. Credit growth is the lone soft spot, with
business credit dipping again in July.
"The Canadian economic recovery continues, with business
activity improving again in July and August," noted Mr. Kavcic.
"That said, momentum is fading, and the work required to fill the
last 20 per cent or so of the COVID hole will be much, much tougher
than it was to fill the first 80 per cent."
The BMO BAI is compiled from ten monthly indicators, with
supporting information from Statistics Canada's preliminary
estimates of a few monthly indicators and high-frequency data on
retail mobility and internal credit card transactions.
Today's BMO BAI report can be found at
https://economics.bmo.com/en/publications/detail/cfade1f2-f3cc-43d5-b980-0e832fb6ce35/
About BMO Financial Group
Serving customers for 200 years and counting, BMO is a highly
diversified financial services provider - the 8th largest bank, by
assets, in North America. With total assets of $974
billion as of July 31, 2020, and a team of diverse and
highly engaged employees, BMO provides a broad range of personal
and commercial banking, wealth management and investment banking
products and services to more than 12 million customers and
conducts business through three operating groups: Personal and
Commercial Banking, BMO Wealth Management and BMO Capital
Markets.
SOURCE BMO Financial Group