BoC Publication on "How Canadian businesses and households are reacting to the trade conflict"; says Trade tensions have led households to worry more about their job security and financial health, and they now intend to spend less

• Concern about job security is particularly evident among people working in sectors that are highly dependent on trade.


• Businesses have revised down their sales outlooks. Indicators of future sales—such as order books and sales enquiries—have declined.


• This decline is particularly prominent in manufacturing. In addition, sectors that depend on households’ discretionary spending continue to report weak demand


• Heightened trade uncertainty has also led many businesses to scale back their hiring and investment plans.


• New investment is being further restrained because: 1) Credit has become more difficult for some businesses to access. 2) The cost of imported capital goods, such as equipment and machinery, has risen.


• 
  Many retailers expect that they would be able to rapidly pass on cost increases linked to tariffs if they were transparent with consumers about the reasons for the increase. But the scale and timing of price increases may be held back by competition, weak demand, and the scope and size of tariffs.

12 Mar 2025 - 13:45- Fixed IncomeImportant- Source: BoC