Paul Martin commentary
There are a lot of moving parts in the economy these days as markets wrestle with the constantly changing geopolitical situation in the Middle East but it seems one of those parts is not going to move at all.
The Bank of Canada has just released its first quarter Business Sentiment report and it is surprisingly upbeat. The mood of those running businesses is better than expected with hiring and investment intentions holding up. They do, though, warn that inflation is beginning to be felt through the supply chain so we should expect it will continue to rise.
All of this has the economists at RBC reacting to the report with a projection that the broader economy is handling these factors reasonably well: well enough that the central bank will not have to raise interest rates for the remainder of the year.
Another metric that showed things were holding better than expected is the recession monitor. In the final quarter of last year, nearly one-quarter of the businesses polled expected a recession. Three months into this year it was nine-percent.
