There’s a lot to like in latest economic data

pay more to get the workers they need to keep up with demand.

Another key for Poloz is business investment.

That dial was disconcertingly dead in 2015 and 2016, as the collapse of oil prices prompted companies to bail on plans to develop new bitumen projects. Finally, ultra-low interest rates and stronger global economic growth stirred the animal spirits of Canadian executives last year. Business investment increased 2.3 per cent over the final three months of 2017, the biggest quarterly gain since 2012. Spending on machinery and equipment jumped 3 per cent, a decent move by historical standards, suggesting that companies are retooling to take advantage of the strongest global economic growth since the initial rebound from the Great Recession.

These data suggest the Bank of Canada will raise interest rates again this year. They aren’t strong enough to give a clear indication of when, however. Higher wages and increased investment are encouraging, but there’s reason to worry that the economy lacks the momentum needed to push through the headwinds being whipped up by U.S. President Donald Trump.

Canada’s economy had a good year in 2017, but it beat the other Group of Seven economies thanks to an excellent start; momentum faded considerably over the second half. GDP grew at an annual rate of 1.7 per cent in the fourth quarter, much slower than the 2.5-per-cent pace the Bank of Canada predicted in January. That means the economy is back in line with what the central bank considers its non-inflationary speed limit, reducing the pressure on policy makers to lift borrowing costs.

Households curbed their spending somewhat over the final few months of 2017, something the central bank has been predicting would happen, as so much of their purchasing in recent years has been done on credit. Unfortunately, it’s still unclear whether other economic actors will pick up the slack.

Exporters were supposed to take over, but they still haven’t recovered their precrisis swagger. International shipments of goods and services grew only 1 per cent in 2017, matching the previous year’s disappointing performance. That’s not what you’d expect from a country that thinks of itself as a “trading nation.” For whatever reason, Canada failed to take full advantage of the upsurge in global economic growth last year, as trade in goods expanded in excess of 3 per cent last year, according to the World Trade Organization.

Increased business investment suggests Canada could do better this year. But that could depend on how executives react to Trump, who appears bent on upending the norms of global trade. His declaration Thursday that he will implement tariffs on imports of steel and aluminum was met with promises of retaliation from virtually all of the U.S.’s major trading partners. Trump appeared to relish the prospect of conflict, tweeting that, “trade wars are good, and easy to win.”

Domestic producers shipped more than $11 billion worth of aluminum to the U.S. in 2017, and more than $7 billion of iron and steel. Canada could end up with an exemption, but the episode is nonetheless a reminder of how vulnerable we are to Trump’s capriciousness.

The central bank said in January that foreign direct investment was less than one would expect for an advanced economy that was expanding at an annual rate of around 3 per cent. A separate StatCan report this week supports that conclusion. International companies invested about $34 billion in Canada last year, the lowest amount since 2010. The country attracted no new investment at all from abroad in the fourth quarter; the $8 billion that foreign entities spent was generated entirely from existing operations.

Uncertainty over trade and Trump’s corporate tax cuts at the end of last year hurt competitiveness. Finance Minister Bill Morneau opted against doing anything about it this week’s budget. That means the Bank of Canada has little choice but to leave interest rates low, no matter what the other gauges on its dashboard might be saying.