Canadian business activity improved more than expected through February according to the Ivey PMI report. However, the 9.2 percentage point improvement in the index to 45.2 would nonetheless keep the major of those surveyed reporting plans to cut back on spending and production going forward. This was the fourth consecutive month that the reading has held below the expansionary/contractionary 50.0 level - the worst pace for this indicator in seven years. Looking into the component figurs, the only improvement was seen in supplier deliveries which rose into positive territory for the first time since May of 2007. On the other hand, prices, inventories and employment all contracted - the latter to recent record lows. For traders, the month-over-month improvement isn’t as important as the general trend in the sector. With a large manufacturing and export sector, this drop in production and employment in the industry will no doubt contribute to the deepening Canadian recession.