Although the Bank of Canada expects the shock from crude oil’s collapse to be “front-loaded” toward the beginning of the year, the latest economic data now suggest the country’s economy may have contracted during the second quarter as well.

For those keeping tabs, a second consecutive quarterly decline following a drop of 0.6% in first-quarter growth would fulfill the textbook definition of a recession.

While Statistics Canada won’t have its numbers for second-quarter gross domestic product (GDP) ready until the end of August, the government agency has released data for April, which showed growth declined by 0.1% month over month.

Put that together with a near-record CAD3.3 billion trade deficit for May, and then add in out-of-control wildfires in the resource-rich provinces of Alberta and Saskatchewan, and it looks like even a flat result for the second quarter would be quite a feat for the economy.

In order for GDP just to keep pace with the prior comparable period, CIBC economists say the economy would have to have grown by at least 0.2% and 0.3% in May and June.

That’s increased the possibility that the central bank will cut its benchmark interest rate at next week’s meeting. In fact, according to futures data aggregated by Bloomberg, traders are now almost even split on whether the Bank of Canada (BoC) will cut rates by a quarter point, to 0.5%, next Wednesday.

Given the new challenges that are emerging in the global economy, including the possibility of a crack-up in the European currency union and the ongoing crash in China’s stock market, and it would seem prudent for the bank to extend its “insurance policy” with further monetary easing.

Indeed, those two worrisome portents have already sent oil prices tumbling again, with North American benchmark West Texas Intermediate down 16.1%, to $51.53 per barrel, since it hit a year-to-date high a little less than a month ago.

Clearly, that adds more turmoil to the already-beleaguered oil and gas sector. But we already knew it would be tough going for this space, even without these new setbacks.

So what about Canada’s other sectors?

Two widely watched business surveys were released on Monday.

The BoC’s quarterly Business Outlook Survey, which is based on interviews conducted with the senior executives of about 100 firms across Canada, showed some “encouraging signs,” as the bank put it.

Although recent trade data suggest that the bank’s long-awaited rise in non-energy exports has yet to materialize, the BoC reports that manufacturers see an increase in future demand from customers in the U.S., based on advance orders and inquiries. They also note that the lower exchange rate has helped boost sales activity.

That’s a key development, since the U.S. absorbs about three-quarters of Canada’s exports. Consequently, Canada’s economic resurgence largely hinges on demand from its neighbor to the south.

Overall, the balance of opinion indicates that companies expect to see a “modest acceleration” in sales growth over the next 12 months, though that outlook is muted compared to a year ago.

At the same time, firms in sectors that operate outside the oil and gas arena but are situated in proximity to Alberta expect to see a knock-on effect as the oil shock dampens spending. Thankfully, the bank notes that domestic demand is strengthening in other regions.

On the future growth front, investment intentions have increased from the first quarter, particularly among manufacturers and other businesses in Central Canada. Exporters who are enjoying higher margins from U.S. dollar-denominated sales plan to reinvest some of the additional earnings into machinery and equipment.

Also on Monday, Statistics Canada released its latest review of investment intentions for the year, based on surveys of 25,000 public and private companies across the country.

Overall capital spending is expected to decline by 4.9% year over year, to CAD251.8 billion. However, the 18.7% drop in planned capital expenditures in the oil and gas sector weighed heavily on that number, since the resource space had accounted for nearly a third of all business spending in the prior year.

The two biggest bright spots were the retail and transportation sectors, which plan to increase spending by 7.7% and 13.4%, respectively. Meanwhile, manufacturers expect to raise spending by 2.7% this year.

To be sure, these numbers don’t give us a lot to cheer about. But they do suggest there’s some room for optimism despite the gloomy headlines.

The good news is that the market doesn’t always march in lockstep with the economy. Like its developed-world peers, Canada’s economy has struggled to recover from the generational downturn in 2008-09.

And while Canada’s economic woes appear to be deepening in the near term, the country’s stock market has yet to mirror the economy’s performance. In fact, the S&P/TSX Composite Index is trading a little less than 8% below the all-time high it hit last September, despite the subsequent oil shock.

But even if the market ends up suffering a steeper correction, our income-oriented approach to stock selection means we can continue collecting dividends—or reinvesting them and compounding our wealth—until better times ahead.