Canadian indicators show some signs of growth

OTTAWA (Reuters) - The Canadian economy showed further signs of modest growth in September and October, two economic indicators demonstrated on Thursday.

Statistics Canada's composite leading indicator grew for the fourth straight month in October from September, by 0.7 percent, exactly as expected. As in September, eight of the 10 categories advanced.

"The leading indicators do a reasonably good job of capturing broader trends in the Canadian economy that are sometimes missed by GDP, suggesting that (the fourth quarter) got off to a decent start," TD Securities economics strategist Ian Pollick said.

Statistics Canada also said wholesale trade edged up by 0.2 percent in September, as gains in the machinery and food sectors barely offset declines in the auto industry. Excluding the auto sector, sales rose by 0.6 percent.

The statistics showed an improvement in the ratio of wholesale inventory to sales to 1.34 from 1.35 in August, as inventories fell 0.9 percent. The ratio was the lowest level since November 2008. The figures are seasonally adjusted.

The wholesale trade gain was less than the 1.4 percent expected in a Reuters survey of analysts.

"The (wholesale) report isn't necessarily a complete disappointment but indicative of the uneven recovery in Canada that has been replete with several false starts already," HSBC economist Stewart Hall said.

"That said, the bulk of the data out on the month of September continues to come down in favor of a decent pick up in economic activity. Indeed, September looks to be setting up as the month in which the economy finally gets up off the launch pad."

Canadian gross domestic product fell by 0.1 percent in August, while July was unchanged, focusing attention on September's data, to be released on November 30.

Statscan also reported that foreigners added C$13.59 billion ($12.82 billion) worth of Canadian securities in September. This was largely due to the fact that Canadian firms buying foreign companies issued new shares to the investors in the acquired firms.

($1=$1.06 Canadian)

(Reporting by Randall Palmer, editing by Rob Wilson)