It’s the canary in the coal mine. The Central Bank’s decision to hold the line on interest rates is another sign that the Canadian economy is slowing and probably is in recession.
Many bank economists are talking about a recession early in the new year and the latest official numbers from StatsCan show we lost ground in the third quarter – basically halfway to the technical definition of a recession being negative growth for two consecutive quarters. Interestingly, in announcing the third quarter downturn, the agency also revised its Q2 numbers upward so we avoided the two consecutive quarters.
But another indicator worth watching – and it is in real time, not requiring a few months to report like StatsCan data – is consumer shipments.Saskatchewan trucking companies report difficulty in securing backhauls when delivering trailers to the US. Normally, they can arrange a backhaul in a day. But it currently takes three or four days as orders for delivery to Central Canada are falling. The last time they saw this was 2008, just before the Great Recession.
