The Globe and Mail reports in its Tuesday edition that the Bank of Canada's gauge of business sentiment, released Monday, has turned negative for the first time in nearly three years. The Globe's Barrie McKenna writes that virtually all measures were weaker in the quarter, including sales growth, spending plans and hiring intentions, with many key readings slipping below historical averages.
The BOC said, "The main headwinds are a more uncertain outlook in the Western Canadian energy sector, continued weakness in housing-related activity in some regions and tangible impacts from global trade tensions." The survey's composite indicator slipped to negative 0.64 in the first quarter, down from a positive reading of 2.31 in the final quarter of 2018. The BOC attributed this to lower demand in both Canada and in foreign markets. The last time the survey was in negative territory was in the third quarter of 2016. The findings strongly suggest the BOC will leave its key rate unchanged on April 24, and perhaps do nothing through the rest of the year. BMO economist Benjamin Reitzes says, "The [survey] doesn't paint the picture of an economy falling off a cliff, but rather one dealing with a meaningful soft patch."
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