Lascelles outlined the different ways he’ll be watching AI adoption and progress to assess its impact on economic growth. The first, and one of the most notable, will be the continuation of capital expenditure by AI hyperscalers on data centers and other AI infrastructure. Lascelles notes that cap-ex on AI was a huge driver for US growth in 2025 and that 2026 is unlikely to see investment at a similar rate. Nevertheless, double-digit growth is still forecast for AI cap-ex, and the level of that investment may play a role in US growth outlooks.
What may also prove telling in 2026 is the realization of productivity gains through these AI investments. If increased productivity is the goal behind is cap-ex, Lascelles notes, then the realization of that goal should result in economic gains that extend beyond just the United States and, from an equity standpoint, the magnificent seven. Lascelles notes the consensus on AI’s productivity benefits being realized in 2026 is not yet firm, but he argues that micro-level data already indicate some larger productivity gains in geographies and industries that have led AI adoption.
From a Canadian perspective, Lascelles will also be watching renegotiation of the USMCA trade agreement very closely. He believes that this will end up with a very similar deal to its current state, with some caveats reflecting sector tariffs. He believes many sector tariffs will remain in place, but his firm believes that average tariff rates should not go up significantly. There may be rhetoric-induced volatility next year, however, as bellicose talk about trade and “tearing up” the agreement result in short spikes of market uncertainty.
Beyond tariffs, Lascelles will also be watching for moves by central banks, which might include further cuts. He’ll also be paying close attention to employment numbers in North America which could tell the story of economic progress. He notes that in the US and Canada, there is very little population growth and immigration ongoing, which he believes should prompt observers to watch unemployment rates more closely than job creation numbers. He notes that due to the US government shutdown, some data from that country has been more muddied, prompting the wider use of other sources, such as ADP payroll numbers.
Lascelles will also be paying close attention to global trade volumes which, despite US tariffs, have held up well in 2025. Despite what he describes as a “hole carved out of the middle” of global trade, he sees useful progress being made in regional trading blocs and economic realignments.
