##mic to more recently, as our economic recovery has progressed, we have adjusted monetary policy to provide the appropriate amount of stimulus the economy has needed. in early november, we ended our quantitative easing program. with the economy once again growing robustly, we judged that this extra layer of stimulus was no longer required. while we expect inflation to ease in the second half of next year, we are closely watching inflation expectations and labour costs to ensure that the forces pushing up prices do not become embedded in ongoing inflation. rest assured that the bank of canada remains resolute in its commitment to keep inflation under control. thank you. 1 evidence of changes in spending patterns for canadians is discussed in the canadian survey of consumer expectations — first quarter of 2021 and in recent research by bank staff. see k. huynh, h. lao, p. sabourin and a. welte, “ what do high - frequency expenditure network data reveal about spending and inflation during covid 19? ” bank of canada staff analytical note no. 2020 - 20 ( september 2020 ). 2 to adapt to the shortage in semiconductor chips, some vehicle manufacturers are reducing various chip - intensive features available in new vehicles, including hands - free technology, heated seats and usb ports. 3 for example, past disruptions to motor vehicle production help us understand the current disturbances in the auto sector arising from the semiconductor shortage. they also help us to forecast the overall impact on the broader economy. 5 / 5 bis central bankers'speeches

economy and inflation are heading, since monetary policy actions take time to flow through the economy and achieve their desired result. nonetheless, even in normal times, there is always a degree of uncertainty when measuring economic activity as well as gauging underlying inflationary pressures related to the output gap and other factors. our models provide a valuable framework upon which to build our forecast, but they reflect historical economic trends and cycles and can ’ t capture all economic realities. given that there is no historical precedent to the sudden closing and reopening of the economy, our models were not built to capture the many economic forces that arose from the pandemic. we routinely list key risks to our inflation outlook in the mpr to help people understand the factors that could affect inflation and the uncertainty around the outlook. we examine incoming data to help us update our assessment of whether a risk is materializing, and then we update our baseline forecast accordingly — taking on board all or part of that materialized risk or removing it if it ’ s no longer a factor. at the beginning of the year, we saw evidence of semiconductor shortages affecting the production and sales of motor vehicles. the production of motor vehicles and parts fell by close to 15 percent during the first half of the year. additional supply constraints started to become apparent as covid - 19 outbreaks further disrupted production of other goods in some countries. from there, evidence of transportation bottlenecks mounted with ocean shipping costs and port delays climbing in the spring. then challenges sourcing parts started affecting exports, investment and inventories. what had begun as a narrow set of supply constraints, largely centred on vehicles, started to grow and come together into a generalized supply shock that interacted in myriad ways with robust demand for goods. it became more apparent over the summer that the situation had evolved considerably, and supply constraints had become much more prevalent. supply chain disruptions suggested a significant, negative impact on productive capacity. firms we spoke to in our business outlook survey leading up to our october decision said that supply chain disruptions were more prevalent and had worsened since earlier in the year. these businesses also expected the disruptions to persist into the second half of 2022. an unusually large portion of respondents said they would have difficulty meeting an unexpected increase in demand, with roughly one - third of firms mentioning the supply chain as a bottleneck, up from less than 10 percent before the pandemic. we took this information on board in our october forecast and drew heavily on our past experience to