costs, we should see food inflation begin to come down. supply bottlenecks have also begun to improve ( chart 3 ). chart 3 : global supply bottlenecks are beginning to ease but remain elevated monthly data index index pmi manufacturing supplier delivery times ( seasonally adjusted, + 50 indicates lengthening ) ( left scale ) pmi manufacturing input prices ( seasonally adjusted, + 50 indicates increasing ) ( left scale ) harper petersen shipping cost index ( 2019 = 100 ) ( right scale ) ships in queue at los angeles and long beach ( 2019 = 100 ) ( right scale ) note : " ships in queue at los angeles and long beach " is an " end - of - period value ". " harper petersen shipping cost index " is an average of weekly data. sources : harper peterson, the marine exchange of southern california and s & p global via haver analytics last observation : september 2022 global manufacturers report that delivery times are still longer than usual, but they are getting shorter, and input cost pressures are easing. global shipping costs have also come down from exceptional highs. these signs of improving global supply chains are encouraging, but we can ’ t count on easing pressure on global prices to lower inflation in canada. at a minimum, improving global factors will take time to filter through to canadian inflation. and the recent depreciation of the canadian dollar in the face of usdollar strength will offset some of this global improvement by making us goods and vacations more expensive for canadians. there is also considerable uncertainty about the evolution of global supply chains and commodity prices. the global economy remains highly disrupted by the effects of the pandemic and - 5the war in ukraine. predicting international price movements isn ’ t easy, and the global inflation picture could change quickly. unfortunately, we don ’ t have much influence over that. our focus is getting domestic inflation down and keeping inflation expectations anchored we can ’ t control global developments. but we can use monetary policy to influence the balance between demand and supply in the canadian economy and therefore ease domestic inflationary pressures over time. all the signs today point to an economy that is clearly in excess demand. labour markets remain very tight. job vacancies have eased a little in recent months but remain exceptionally high. our business surveys report widespread labour shortages. and wage growth has risen and continues to broaden. with demand running ahead of supply, competition is posing less of a restraint on price increases, and businesses are passing through higher input costs more quickly.

analytical note today about wages, and will continue to monitor this issue. in terms of new capacity creation, we have also seen positive signs. business investment has continued to grow, our business outlook survey shows that intentions remain positive, and historical data revisions imply that capacity is greater than we previously thought. new companies are typically a key source of capacity growth, and while it is still too early to determine the trend, recent data on firm creation have been encouraging. we will update our views on the economy ’ s potential in the april mpr. the second issue was how the evolution of capacity pressures will affect the outlook for inflation. as the governor noted in a speech last november, a number of economists and policy - makers have been struggling to explain weaker - than - expected inflation in many jurisdictions. this has not been the case here in canada, where core inflation measures have been increasing and 1 / 2 bis central bankers'speeches behaving largely as we would have expected. inflation was actually a bit stronger than we projected in october, rising to just above our 2 per cent target near the end of last year. this was due to the temporary impact of higher energy prices. we expect a bit of a dip in inflation in the near term, largely because of the base - year effects of gasoline prices. the big picture is that we project inflation to fluctuate relatively close to target throughout the projection horizon. that said, there is still the risk of a drag on inflation coming from global trends, such as digitalization in the economy. this will continue to be something that we watch closely. the final key issue we discussed is how best to account for the uncertainty surrounding the renegotiation of nafta in our policy decisions. where trade policy decisions have already been taken, such as in the case of softwood lumber, we have built in their expected effects. in addition, while the results from the business outlook survey were positive, an increasing number of firms told us that uncertainty surrounding the outcome of the talks is weighing on their investment decisions and, to a lesser extent, trade. because of this, we added some more negative judgement to our profile for both business investment and exports. consistent with this approach, our outlook is based on the premise that current trade agreements will remain in place over the projection horizon. there are still a wide range of possible outcomes, which could play out over many different timelines. we do not know how the talks will conclude, and we do not know how governments