If you want numbers on the gross domestic product, on inventories, on the trade balance, employment or inflation, Statistics Canada and other sources have more than enough data to keep you busy. Unfortunately, their data are usually a little bit late, and precious little is mining-oriented.
Long before the economic downturn was officially called a recession, readers of The Northern Miner were probably well aware of receivers liquidating the assets of some ill-fated diamond drill companies. It was only the economists who waited for two consecutive quarters of “negative economic growth” to realize what was going on.
Economic signposts for the mining industry alone are more difficult to come by, but one of the most intriguing is a feature that appears in our pages each week. It is a combination of the career and classified advertising, which creates a reasonably reliable leading indicator of activity in the mining industry. The Ontario government, for example, tracks the advertising space in those two sections as an indication of the mining industry’s health.
A 5-month moving average of advertising space in those two sections shows a steep climb from early 1986 to a peak in late 1987 and early 1988 — coinciding, of course, with the height of flow-through financing. From there, again to nobody’s surprise, there has been a more gradual but steady decline, well before the two-consecutive-quarters rule.
The good news is that since June, 1990, there has been an almost unbroken increase in those advertising sections — good news for us, but also a signal that the mining industry may be heading out of this recession without suffering the disastrous decline in commodity prices that marked the recession of the early 1980s.
That’s no guarantee, but any indication that the worst of this recession is over comes as welcome news.
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