Low oil prices will continue to weigh on Canadian economic activity in 2015

According to the CFIB business confidence indicator, Canadian small business sentiment rose by 2.4 points in March to 61.5. Today's reading pushes the index further away from the crucial 50 level that marks a contraction in business sentiment. 

While this represents an improvement from last month, the index level is still lower than it was relative to March 2014.

The improvement in the headline reading in March is encouraging, but the details of the report point to some of the challenges facing the Canadian economy this year. 

"We believe that the low oil prices will continue to weigh on economic activity in 2015. Indeed, given our expectation for another downward leg in oil prices in Q2, business sentiment in the natural resource sector will likely remain suppressed.

Looking ahead, a weaker Canadian dollar and steady U.S. demand should support economic activity in both sectors over the next few years." - said TD Economics in a report on Thursday.