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Canada’s recent economic slowdown and global trade tensions have begun to impact businesses confidence, according to a Bank of Canada survey.

The Ottawa-based central bank’s first-quarter survey of executives — which took place in February and March — showed softening expectations for sales along with a sharp decline in the number of companies reporting labour shortages. The Bank of Canada’s composite gauge of sentiment turned negative and dropped to its lowest since 2016.

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The main headwinds are a more uncertain outlook in the Western Canadian energy sector

The softening picture reflects how the confluence of headwinds — from global trade wars, to last year’s slump in oil prices and a sluggish housing market — is beginning to ripple through the nation’s economy. The report will only reinforce expectations the central bank will keep interest rates on hold indefinitely.

“The main headwinds are a more uncertain outlook in the Western Canadian energy sector, continued weakness in housing-related activity in some regions, and tangible impacts from global trade tensions,” the Bank of Canada said in the report in which it described the deterioration in sentiment as a “softening.”