Economic Glossary – Canada2019-01-04T11:37:20+00:00


The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported.

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. Canada releases fresh GDP data on a monthly basis.

Bank of Canada (BOC) governing council members come to a consensus on where to set the rate. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

The Bank of Canada’s Monetary Policy Report gives investors a detailed insight into the economic conditions that influenced the decision on where to set interest rates.

The Business Outlook Survey released by the Bank of Canada measures the business outlook in Canada as derived from a survey of about 100 selected businesses which asks respondents to rate the relative level of general business conditions.

Core Retail Sales measures the change in the total value of sales at the retail level in Canada, excluding automobiles. It is an important indicator of consumer spending and is also considered a pace indicator for the Canadian economy.

The Ivey Purchasing Managers’ Index (PMI) measures the activity level of purchasing managers in Canada. A reading above 50 indicates expansion; a reading below 50 indicates contraction. The index is a joint project of the Purchasing Management Association of Canada and the Richard Ivey School of Business. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.

Employment Change measures the change in the number of people employed. Job creation is an important indicator of consumer spending.

Labor Productivity measures the change in labor efficiency of Canadian workers when producing goods and services. Productivity and labor-related inflation are directly linked, a drop in a worker’s productivity is equivalent to a rise in their wage. When businesses pay more for labor the higher costs are usually passed on to the consumer.