The Canadian economy continues to struggle under the weight of past BoC rate hikes, resulting in a flat GDP over the past seven months. Worse for the trucking sector is that goods-producing sectors have underperformed the services sector significantly, with truck freight bouncing along the bottom since April and well below year-earlier levels. As such, capacity will remain loose, and rates will remain under pressure until any combination of resurgent freight volumes and fleet rationalization. The silver lining to the no-growth macro picture and the increasing threat of recession is that policy rates have likely already peaked. Nonetheless, given inflation remaining uncomfortably above the BoC's 2% target, BMO economists believe any policy rate relief will have to wait until at least mid-2024.
Industry Update Fall 2023: Canada Truck Transportation
