A key index of early Canadian economic trends posted its largest gain of 2016 as prices for commodities such as crude oil rebounded.

The Macdonald-Laurier Institute’s Leading Indicator advanced 0.4 percent in May, faster than a revised 0.2 percent rise for April and the biggest gain since October. Commodity prices tracked by the Ottawa-based policy research group rose 3 percent, breaking a string of declines that had lasted almost two years.

The index seeks to find early clues about swings in economic momentum, and May was a breather between fears over weak Chinese growth that triggered a global stock slump at the start of the year and the recent Brexit vote to take the U.K. out of the European Union. However wildfires in oil-producing Alberta that month, which hobbled crude production, are likely to offset gains from the broad rise in commodity prices.

“This may limit the rebound in the Canadian economy in the second half of the year,” Philip Cross, a researcher at the institute, wrote in a report.

The MLI index also showed gains in housing, consumer confidence and a decline in the length of the factory workweek.

Canada’s latest report on gross domestic product also gave a mixed view of the economy. Gross domestic product rose 0.1 percent in April as gains in manufacturing and services were curbed by a decline in heavy crude oil production, Statistics Canada said Thursday.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE