OTTAWA - Gains on the Toronto Stock Exchange in February helped push Statistics Canada's composite leading index higher last month, pointing toward a pick up in the economy in the coming months.
The agency said Wednesday the index, which was up 0.6 per cent, rose for the eighth consecutive month in February. It was up 0.4 per cent in January.
The largest gains in the index came from the financial sectors, including the Toronto Stock Exchange which posted a strong start to the year.
Manufacturing also supported the gains with an increase in new orders and the ratio of inventories to sales rose for the fourth consecutive month.
Overall, six of the 10 components to the index were higher in February.
Auto sales helped boost household demand for durable goods, while a rosier outlook for the U.S. economy saw the U.S. leading indicator also rise on increases in the financial and manufacturing sectors south of the border.
The housing component edged down following five monthly gains while sales of furniture and appliances were also down.
The increase in the leading index comes as the Canadian economy appears to be picking up steam.
The Royal Bank predicted Tuesday that Canada's real gross domestic product will rise by 2.6 per cent in both 2012 and 2013, while TD Bank increased its outlook for the Canadian economy for the first time in a year to 2.2 per cent for this year.
Royal Bank said strength in the U.S. economy, low interest rates, solid corporate balance sheets and elevated commodity prices are setting the stage for continued expansion.
High commodity prices and strong balance sheets are expected to boost business investment's overall contribution to growth by just under one percentage point this year and next.
However TD has cautioned that household debt remains high and governments are looking to reduce spending, a move that will weigh on economic growth.
