It can take some time for the aggregate
investment data to uncover the adjustments in investment activity in response to the changes in outlook
or its uncertainty, as projects that are well underway may still continue to show up in aggregate
investment. Therefore, to provide a more in-depth analysis of investment activity, the focus is on explaining changes in aggregate investment flows, as indicated by the data on volumes of announced
new and shelved investment projects. Staff analysis suggests that heightened policy uncertainty has had
a particularly pronounced link with the decline in new investments, and in an increasing share of
investments that were postponed or cancelled. After controlling for these factors, financing costs do not
appear to be a critical factor in explaining a decline in new investments (Tables 1 and 2).