And, of course, the uncertainty isn’t limited just to the new NAFTA—global concerns, particularly on the US–China trade front, are clearly hurting confidence and leading firms to delay investment decisions. Another possible explanation for the weakness in investment is timing.
The accelerated depreciation tax changes announced late last year by the federal government are welcome news for corporations, and it’s possible that in anticipation of the changes, investment decisions were postponed. If so, we should begin to see a pickup in the first quarter of this year, which would be consistent with recent quarterly readings from our Business Outlook Survey.