Canadians optimistic about the economic future; consumer confidence steady and strong
Ottawa - July 12, 2004: While US consumer confidence and expectations have been volatile - declining then rising rapidly, Canadian confidence has remained steady and strong for the past three quarters, according to the latest results of the Decima-Investors Group Canadian consumer confidence survey.
Based on a nation-wide survey conducted by Decima Research Inc. in May, the Decima-Investors Group Index of Canadian Consumer Confidence stands at 87.9, stable for the last three quarters.
Based on a nation-wide survey conducted by Decima Research Inc. in May, the Decima-Investors Group Index of Canadian Consumer Confidence stands at 87.9, stable for the last three quarters.
In the United States, the Index of Consumer Sentiment published by the University of Michigan stood at 86.9 in May; a decline of 7.2 points from 94.1 in the previous quarter (this measure is directly comparable to the Decima-Investors Group Index). In June, the US index rebounded to 96.0.
In May, when the Canadian data were gathered, consumer confidence was essentially the same here as in the U.S.
Canadian consumers in the West are more confident than those in the East - the highest confidence levels are found in Alberta (91.1) and the lowest in Quebec (79.9). As well consumer confidence increased among those with annual household incomes below $40,000 (+3.3).
Consumer Expectations. While the US had a significant drop of 9.1 points to 75.3 on the consumer expectations index over the quarter ending in May, Canada had only a slight decline of 1.3 points to 83.8. As such, Canadians in May were more optimistic than Americans about the economic future for the first time since 2003. In June, the U.S. expectations index climbed back up to 85.0. The consumer expectations sub-index (one of two components comprising the overall index) measures expectations about economic conditions into the future.
Consumer expectations in Canada were down for the Atlantic provinces (-6.2 points), Ontario (-2.6), and women (-8.7). Increases were experienced by those living in BC (+1.2) and Alberta (+1.4).
"Stable employment, relatively little recent movement in interest rates and a stable to dropping unemployment rate are all factors in strong and steady consumer confidence levels in Canada," said Charles Feaver, Vice-President of Research at Investors Group. "The outlook for the near term future is also strong given the 18 per cent increase in the stock market in Canada over the past 12 months."
The following table summarizes selected economic indicators for the recent quarter and dating back to September 2001.
| September 2001 | November 2004 | February 2005 | May 2005 | |
|---|---|---|---|---|
| Unemployment Rate | 7.2% | 7.3% | 7.0% | 7.0% |
| Consumer Price Index | 2.6% | 2.3% | 2.1% | 2.4% (April) |
| Canadian Dollar/US$ | 0.65 | 0.84 | 0.81 | 0.80 (June 13) |
| Prime (business) Rate | 5.25% | 4.25% | 4.25% | 4.25% |
| TSX Composite Index | 6,513 (Sept. 21) | 8,959 (Nov. 19) | 9,676 (Feb. 23) | 9,840 (June 13) |
"Changes in consumer confidence in the U.S. have been attributed to rising interest rates, weakening job prospects and higher gas prices," comments Tony Coulson, Vice President, Public Affairs at Decima Research Inc. "In Canada unemployment and interest rates are flat, we are no longer faced with a summer election, and consumers are confident about current and future economic conditions," he added.
The results are based on a Decima teleVox survey conducted with a representative sample of 2,031 Canadians (18 years and older) between May 26 and June 5, 2005. A sample of this size will provide results that can be considered accurate for the population overall to within plus or minus 2.2 per cent, 19 times out of 20. The Decima teleVox is a national telephone survey conducted weekly by Decima Research Inc. Clients can commission their own customized, proprietary research questions on any of the weekly surveys for a per-question fee.
Index of Canadian Consumer Confidence
The Decima - Investors Group Index of Canadian Consumer Confidence is based upon five survey questions that ask respondents about their perceptions of current and future economic conditions. The data from the five questions are combined using a formula to calculate a single number - the Index of Canadian Consumer Confidence. The three forwarding-looking questions are combined using a different formula to calculate the consumer expectations sub-index. Decima's Index is closely modeled on the University of Michigan's Index of Consumer Sentiment. The Michigan index is one of the oldest and most widely referenced ongoing measures of consumer confidence in the United States. It has been tracked continuously since 1966.
Decima Research s Canada's fastest-growing full service public opinion and marketing research company, offering research-based advice to clients in the public, private and non-profit sectors, as well as large-scale data collection capabilities. Please visit us on the web at: www.decima.com
Investors Group is a national leader in delivering personalized financial solutions to more than one million Canadians, through a network of approximately 3,500 Consultants located in over 100 Financial Planning Centres. In addition to an exclusive family of mutual funds, managed asset and other investment vehicles, Investors Group offers a wide range of mortgage, insurance, brokerage and banking services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies.
| For more information contact: | |
|---|---|
| Tony Coulson Decima Research (613) 230-2013 tcoulson@decima.com |
Ron Arnst Media Relations (204) 956-3364 ron.arnst@investorsgroup.com |
The following tables summarize the data presented in this release.
| Index of Canadian Consumer Confidence | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 2003 |
May 2003 |
Aug 2003 |
Nov 2003 |
Feb 2004 |
May 2004 |
Aug 2004 |
Nov 2004 |
Feb 2005 |
May 2005 |
Change | ||||
| Canada | 80.4 | 88.4 | 85.5 | 93.4 | 86.6 | 79.5 | 87.6 | 88.0 | 88.0 | 87.9 | -0.1 | |||
| Region | ||||||||||||||
| Atlantic | 76.2 | 84.5 | 88.9 | 89.2 | 87.2 | 79.1 | 85.8 | 90.2 | 87.9 | 84.4 | -3.5 | |||
| Quebec | 82.3 | 92.4 | 88.4 | 88.2 | 84.0 | 78.4 | 90.3 | 83.6 | 84.7 | 85.9 | +1.2 | |||
| Ontario | 84.0 | 88.1 | 84.3 | 95.6 | 86.4 | 79.7 | 87.0 | 87.1 | 88.7 | 87.5 | -1.2 | |||
| Man./Sask. | 82.1 | 87.7 | 86.4 | 91.0 | 83.1 | 80.0 | 83.8 | 85.6 | 86.4 | 89.9 | +3.5 | |||
| Alberta | 77.8 | 85.0 | 84.0 | 95.2 | 83.2 | 79.7 | 88.6 | 97.0 | 93.3 | 92.9 | -0.4 | |||
| B.C. | 69.7 | 87.2 | 83.1 | 90.0 | 87.1 | 79.0 | 86.3 | 93.0 | 89.6 | 89.9 | +0.3 | |||
| Language | ||||||||||||||
| English | 79.7 | 87.5 | 85.2 | 93.4 | 86.0 | 79.4 | 86.8 | 89.6 | 89.1 | 88.5 | -0.6 | |||
| French | 82.7 | 91.7 | 89.1 | 88.9 | 83.5 | 78.0 | 89.9 | 83.0 | 84.5 | 85.8 | +1.3 | |||
| Gender | ||||||||||||||
| Male | 86.3 | 91.9 | 90.4 | 96.6 | 89.3 | 81.9 | 90.4 | 91.5 | 91.8 | 90.3 | -1.5 | |||
| Female | 74.9 | 85.2 | 82.2 | 86.8 | 79.8 | 74.1 | 84.9 | 84.8 | 84.5 | 85.7 | +1.2 | |||
| Age | ||||||||||||||
| 18-34 | 87.0 | 97.2 | 94.0 | 99.3 | 94.0 | 90.0 | 96.1 | 94.7 | 94.6 | 92.7 | -1.9 | |||
| 35-54 | 80.0 | 86.7 | 84.7 | 95.5 | 84.9 | 76.4 | 85.8 | 87.4 | 86.7 | 88.5 | +1.8 | |||
| 55+ | 73.0 | 80.4 | 76.9 | 89.3 | 81.5 | 70.2 | 79.9 | 81.1 | 82.1 | 82.2 | +0.1 | |||
| Income | ||||||||||||||
| Below $40,000 | 73.8 | 80.4 | 80.3 | 83.8 | 78.5 | 75.4 | 81.3 | 81.7 | 79.0 | 82.3 | +3.3 | |||
| $40,000 - $59,999 | 83.1 | 93.0 | 87.2 | 95.6 | 87.7 | 80.2 | 88.9 | 89.1 | 91.0 | 87.0 | -4.0 | |||
| $60,000 - $79,999 | 84.7 | 93.2 | 90.0 | 94.2 | 90.4 | 83.0 | 93.5 | 90.9 | 96.5 | 88.2 | -8.3 | |||
| $80,000 - $99,999 | 89.2 | 98.7 | 86.0 | 98.2 | 91.0 | 83.6 | 94.4 | 98.6 | 94.5 | 93.5 | -1.0 | |||
| $100,000+ | 93.8 | 97.1 | 98.9 | 107.3 | 95.6 | 90.3 | 97.6 | 103.1 | 103.9 | 99.3 | -4.6 | |||
| USA1 | 79.9 | 92.1 | 89.3 | 93.7 | 94.4 | 90.2 | 95.9 | 92.8 | 94.1 | 86.9 | -7.2 | |||
1As published by the University of Michigan.
| Consumer Expectations (sub-index) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 2003 |
May 2003 |
Aug 2003 |
Nov 2003 |
Feb 2004 |
May 2004 |
Aug 2004 |
Nov 2004 |
Feb 2005 |
May 2005 |
Change | ||||
| Canada | 78.4 | 86.7 | 82.1 | 87.7 | 81.5 | 73.1 | 83.4 | 85.6 | 85.1 | 83.8 | -1.3 | |||
| Region | ||||||||||||||
| Atlantic | 72.0 | 84.2 | 83.9 | 83.8 | 79.2 | 72.3 | 81.1 | 90.8 | 86.9 | 80.7 | -6.2 | |||
| Quebec | 81.6 | 89.5 | 85.5 | 80.2 | 76.7 | 70.5 | 85.8 | 78.1 | 80.6 | 79.9 | -0.7 | |||
| Ontario | 81.1 | 86.3 | 80.8 | 90.0 | 82.0 | 72.8 | 81.8 | 84.9 | 85.2 | 82.6 | -2.6 | |||
| Man./Sask. | 79.1 | 83.9 | 81.5 | 82.6 | 76.8 | 72.1 | 78.7 | 82.7 | 84.8 | 85.3 | +0.5 | |||
| Alberta | 76.2 | 83.2 | 81.4 | 88.1 | 75.4 | 76.6 | 89.3 | 95.8 | 89.7 | 91.1 | +1.4 | |||
| B.C. | 70.4 | 87.9 | 79.9 | 85.1 | 84.6 | 73.3 | 83.5 | 93.6 | 88.9 | 90.1 | +1.2 | |||
| Language | ||||||||||||||
| English | 77.4 | 86.1 | 82.1 | 87.4 | 80.5 | 73.1 | 82.9 | 88.3 | 86.7 | 85.0 | -1.7 | |||
| French | 82.0 | 88.5 | 85.8 | 81.3 | 76.7 | 70.1 | 85.1 | 77.2 | 79.7 | 79.5 | -0.2 | |||
| Gender | ||||||||||||||
| Male | 84.5 | 90.6 | 88.1 | 91.6 | 85.7 | 77.0 | 86.6 | 88.5 | 88.9 | 87.0 | -1.9 | |||
| Female | 72.9 | 83.0 | 78.2 | 78.3 | 71.3 | 65.4 | 80.5 | 83.0 | 89.5 | 79.5 | -0.2 | |||
| Age | ||||||||||||||
| 18-34 | 84.3 | 96.0 | 92.4 | 97.1 | 91.4 | 86.8 | 92.3 | 92.9 | 92.4 | 88.1 | -4.3 | |||
| 35-54 | 78.6 | 84.8 | 81.0 | 92.8 | 82.1 | 71.3 | 82.1 | 84.5 | 82.9 | 84.3 | +1.4 | |||
| 55+ | 71.3 | 78.1 | 71.7 | 87.9 | 79.1 | 64.6 | 74.9 | 78.6 | 79.2 | 78.6 | -0.6 | |||
| Income | ||||||||||||||
| Below $40,000 | 73.7 | 80.5 | 78.3 | 78.8 | 74.7 | 70.2 | 78.8 | 80.5 | 79.1 | 79.3 | +0.2 | |||
| $40,000 - $59,999 | 80.5 | 90.6 | 83.1 | 89.1 | 81.0 | 73.1 | 85.0 | 87.0 | 87.3 | 83.5 | -3.8 | |||
| $60,000 - $79,999 | 81.6 | 89.8 | 86.1 | 85.8 | 83.1 | 76.6 | 87.7 | 87.4 | 91.8 | 84.6 | -7.2 | |||
| $80,000 - $99,999 | 86.7 | 95.1 | 81.6 | 90.2 | 82.4 | 74.2 | 87.5 | 93.8 | 89.6 | 90.5 | +0.9 | |||
| $100,000+ | 88.7 | 94.3 | 93.7 | 99.6 | 89.1 | 81.2 | 91.3 | 98.2 | 97.1 | 91.8 | -5.3 | |||
| USA1 | 69.9 | 91.4 | 82.5 | 88.1 | 88.5 | 81.6 | 88.2 | 85.2 | 84.4 | 75.3 | -9.1 | |||
1As published by the University of Michigan.
