U.S. demand slowing

As the U.S. economy has slowed in recent months, that impact has trickled up to Canada.

“Eighty six percent of Canadian exports go to the U.S.,” Buskas says.

Canada exports a variety of items to the U.S., including manufactured goods such as autos and housing-related products. Recent economic data has revealed a rising inventory-to-sales ratio in Canada.

“That means supplies run ahead of demand,” Basile says. “It’s a red flag for growth.”

However, Basile adds the situation is a “classic cyclical adjustment. It’s happening in the middle of the expansion and now we are getting to a point where certain important export sectors are slowing down.”