Last month, the Bank of Canada (BoC) caught the consensus off-guard, cutting rates as “insurance” – according to BoC Governor Stephen Poloz – against plunging oil prices, which was consistent with our global growth slowdown call. That drop in oil prices has slowed the Canadian economy, with GDP growth declining to a seven-month low in November. Manufacturing, in particular, has been hit hard, as manufacturing GDP growth slowed from 5.8% in July to 0.3%, a ten-month low, in its latest reading. Following the BoC’s rate cut, will the faltering manufacturing sector turn around?

ECRI’s latest analysis of its specialized leading indexes clarifies the trajectory of the Canadian manufacturing sector, signaling whether it has bottomed or will continue to worsen.