Canada’s business outlook indicator—a measure of business activity, prices and costs—improved to minus 1.78 in the fourth quarter from minus 2.27 last quarter, its highest level since before the trade war began roughly a year ago, according to the Bank of Canada’s fourth-quarter survey. (The Logic)

Talking point: Despite the uptick, firms remain cautious about the future. About 21 per cent of companies plan to cut workers over the next year, the highest share since 22 per cent in the second quarter of 2016. The Bank of Canada said overall business sentiment remains “subdued,” citing economic and political conditions as well as slowing demand and cost pressures. The share of firms planning or budgeting for a recession in Canada over the next 12 months fell to 22 per cent from 33 per cent previously. Still, several of the country’s top bank economists warn that deeper weaknesses persist in the economy, even as Canada avoided a recession last year.

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