"The biggest thing about the Ivey PMI is there's quite a bit of seasonality to it," said BMO deputy chief economist Doug Porter. "Typically, June is one of strongest months of the year for the Ivey, but we do think the underlying softness of the auto sector will pull it from its relatively healthy May level."

Porter predicted the indicator, which is not adjusted for seasonality, will retreat to 59 from its May figure of 62.5. However, Porter said that with many other manufacturing and business surveys around the world "struggling to stay above 50," a 59 would still be "fairly robust."

The consensus forecast for the Canadian indicator is 62.3.

HSBC Canada market strategist Stewart Hall is forecasting a score of 65 for the Ivey PMI, saying that the indicator tends to run strong in June.

"For the last five years the headline purchaser index for the month of June has not had a reading below 60," he wrote. Hall added that the indicator tends to receive more attention from foreign exchange market participants outside of Canada and is largely ignored by the local bond market.

"It remains a narrow survey (175 participants), having a limited history while lacking a seasonal adjustment," he said.

The Ivey PMI shows responses to one question: "Were your purchases last month in dollars higher, the same, or lower than the previous month?" A figure above 50 shows an increase while a figure below 50 denotes a decrease.

By Sean McKibbon, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it

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