Canadian consumer confidence falls to lowest level in 4 years
Higher energy prices and Hurricane Katrina cited for drop in Decima-Investors Group Index
Ottawa – October 3, 2005: The latest Decima-Investors Group Index of Canadian Consumer Confidence showed a sharp decline in both confidence and optimism. In the first release of this index since Katrina struck, Canadian results parallel a similar decline in the US.
The index plunged to 75.0, its lowest level since September 2001. The index, which had been remarkably stable for the past 3 quarters, dropped 13 points from the May level of 87.9. The decline in consumer confidence is the largest recorded in a single quarter since the index was established in 2001.
"These results likely reflect a combination of rising concerns about energy prices, coupled with concerns about the economic impacts caused by Hurricane Katrina" commented Bruce Anderson, CEO of Decima Research. "The pattern of results indicates that Canadians seem to feel that the macro economic impacts will be more short term than long term, because the sharpest rise is in concerns about the one year economic outlook. While these conditions might depress consumption levels, people appear to think that they will be able to get through the rough patch."
Charles Feaver, Vice-President of Research at Investors Group, observed that; " More consumers say they are worse off now than a year ago - a logical consequence of rising gas prices. But even though Canada is an energy producer, and in a position to benefit from higher prices, the expectation of increased economic activity in the energy sector is clearly not being felt across the country. While Alberta and BC residents are more positive about prospects for the Canadian economy, consumers in other regions have more negative expectations."
The Decima - Investors Group Index of Canadian Consumer Confidence is a composite of a series of questions measuring feelings about personal financial as well as national economic sentiment. All five of the component measures dropped in the most recent period, apparently led by a sense that the short-term (one year) economic outlook was darkening.
The results are based on a Decima teleVox survey conducted with a representative sample of 2,025 Canadians (18 years and older) conducted between September 8 and 18, 2005. A sample of this size will provide results that can be considered accurate 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.
The Decima - Investors Group Index of Canadian Consumer Confidence is based upon a series of 5 questions that ask respondents about their perceptions of current and future economic conditions. Decima's Index is closely modeled on the University of Michigan 's Index of Consumer Sentiment, one of the oldest and most widely referenced measures of consumer confidence in the United States, tracked continuously since 1966.
Recent Trends in Selected Economic Indicators
| September 2001 |
November 2004 |
February 2005 |
May 2005 |
September 2005 |
|
|---|---|---|---|---|---|
| Unemployment | 7.2% | 7.3% | 7.0% | 7.0% | 6.8% (Aug) |
| CPI | 2.6% | 2.3% | 2.1% | 2.4% (Apr) |
2.6% (Aug) |
| C$/US$ | 0.65 | 0.84 | 0.81 | 0.80 (Jun 13) |
0.85 (Sept 26) |
| Prime Rate | 5.25% | 4.25% | 4.25% | 4.25% | 4.5% |
| TSX | 6,513 (Sept 21) |
8,959 (Nov 19) |
9,676 (Feb 23) |
9,840 (Jun 13) |
10,972 (Sept 26) |
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 |
Sept 2005 |
Change | |||
| Canada | 80.4 | 88.4 | 85.5 | 93.4 | 86.6 | 79.5 | 87.6 | 88.0 | 88.0 | 87.9 | 75.1 | -12.8 | ||
| Region | ||||||||||||||
| Atlantic | 76.2 | 84.5 | 88.9 | 89.2 | 87.2 | 79.1 | 85.8 | 90.2 | 87.9 | 84.4 | 64.3 | -20.1 | ||
| Quebec | 82.3 | 92.4 | 88.4 | 88.2 | 84.0 | 78.4 | 90.3 | 83.6 | 84.7 | 85.9 | 70.3 | -15.6 | ||
| Ontario | 84.0 | 88.1 | 84.3 | 95.6 | 86.4 | 79.7 | 87.0 | 87.1 | 88.7 | 87.5 | 74.0 | -13.5 | ||
| Man/Sask | 82.1 | 87.7 | 86.4 | 91.0 | 83.1 | 80.0 | 83.8 | 85.6 | 86.4 | 89.9 | 70.9 | -19.0 | ||
| Alberta | 77.8 | 85.0 | 84.0 | 95.2 | 83.2 | 79.7 | 88.6 | 97.0 | 93.3 | 92.9 | 88.5 | -4.4 | ||
| B.C. | 69.7 | 87.2 | 83.1 | 90.0 | 87.1 | 79.0 | 86.3 | 93.0 | 89.6 | 89.9 | 85.8 | -4.1 | ||
| USA1 | 79.9 | 92.1 | 89.3 | 93.7 | 94.4 | 90.2 | 95.9 | 92.8 | 94.1 | 86.9 | 76.9 | -10.0 | ||
| Consumer Expectations (sub-index) | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Feb 2003 |
May 2003 |
Aug 2003 |
Nov 2003 |
Feb 2004 |
May 2004 |
Aug 2004 |
Nov 2004 |
Feb 2005 |
May 2005 |
Sept 2005 |
Change | |||
| Canada | 78.4 | 86.7 | 82.1 | 87.7 | 81.5 | 73.1 | 83.4 | 85.6 | 85.1 | 83.8 | 72.5 | -11.3 | ||
| Region | ||||||||||||||
| Atlantic | 72.0 | 84.2 | 83.9 | 83.8 | 79.2 | 72.3 | 81.1 | 90.8 | 86.9 | 80.7 | 65.5 | -15.2 | ||
| Quebec | 81.6 | 89.5 | 85.5 | 80.2 | 76.7 | 70.5 | 85.8 | 78.1 | 80.6 | 79.9 | 65.4 | -14.5 | ||
| Ontario | 81.1 | 86.3 | 80.8 | 90.0 | 82.0 | 72.8 | 81.8 | 84.9 | 85.2 | 82.6 | 71.0 | -11.6 | ||
| Man/Sask | 79.1 | 83.9 | 81.5 | 82.6 | 76.8 | 72.1 | 78.7 | 82.7 | 84.8 | 85.3 | 69.3 | -16.0 | ||
| Alberta | 76.2 | 83.2 | 81.4 | 88.1 | 75.4 | 76.6 | 89.3 | 95.8 | 89.7 | 91.1 | 85.8 | -5.3 | ||
| B.C. | 70.4 | 87.9 | 79.9 | 85.1 | 84.6 | 73.3 | 83.5 | 93.6 | 88.9 | 90.1 | 86.0 | -4.1 | ||
| USA1 | 69.9 | 91.4 | 82.5 | 88.1 | 88.5 | 81.6 | 88.2 | 85.2 | 84.4 | 75.3 | 63.6 | -12.0 | ||
1As published by the University of Michigan.
Decima Research is 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: | |
|---|---|
| Ron Arnst Media Relations (204) 956-3364 ron.arnst@investorsgroup.com |
Bruce Anderson Decima Research (613) 230-2200 banderson@decima.com |
