Despite the cumulative headwinds of prior BoC rate hikes, Canada’s economy at the headline level has outperformed low expectations. However, conditions in the trucking sector have not kept pace given that until very recently, the services sector has generated most of the growth over the past year while goods-producing sectors have lagged. Still, despite inflation remaining uncomfortably above the BoC’s 2% target, decent employment trends, and annual wage gains above 5%, the expectation by BMO economists is for easing monetary policy on both sides of the border by mid-summer. While waiting for those rate cuts and accompanying macro tailwinds, industry supply-demand dynamics will continue to favor shippers until any combination of resurgent freight volumes and fleet rationalization regains the upper hand.

FULL REPORT