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Consumer Confidence Edges Upwards

Consumer confidence in Canada reversed its recent downward trend and moved upward in the third quarter.

The Nielsen Consumer Insights – Investors Group Index of Consumer Confidence stood at 85.8 in the third quarter of 2014, a noticeable increase over the 81.2 recorded in the third quarter of 2013 and 80.6 recorded in the previous quarter this year. This is the highest consumer confidence level since first quarter of 2011.

According to Nielsen Consumer Insights Group Director Doug Anderson; “The Canadian Consumer Confidence is showing promise with a greater proportion of Canadians feeling positive about their and Canada’s economic growth in coming years. The second quarter of 2014 has seen an across the board increase in almost all elements of consumer confidence. The key highlights being the 6 point increase in the proportion of Canadians who say that they will be better off financially in the coming year and those indicating this is a right time to make a big purchase. In fact, at 55%, more Canadians feel now is a good time to make a major purchase than at any time over the past five years. This level is comparable to the levels observed previous to 2008. The proportion of Canadians who hold a positive impression of the Canadian economic outlook next year also grew by 5 points while the economic outlook over a longer term of five years remained unchanged.”

“Confidence in the economic environment and in the future are important factors for Canadians who are planning their personal financial life”, said Gaetan Ruest, Vice-President of Corporate Research at Investors Group. “Working with a financial planner to develop a personalized, comprehensive plan helps many Canadians build their confidence further as they strive to achieve their personal goals.”

18% Canadians said they see good times for the economy in the next 12 months (up 3 points from the last quarter), while another 14% said they see bad times.

The optimism about the long-term outlook for the economy seems to be returning to last year’s levels with nearly half (48%) of Canadians saying they see good times ahead in the next five years. Conversely, 36% believe the next five years will bring unemployment and recession. A comparison with third quarter of 2013 indicates that the negative sentiment has dropped by 1 percentage point during the last year.

More than a quarter (27%) of Canadians have a positive outlook about their own and their family’s financial well being in the coming 12 months. This is 6 percentage points higher than the third quarter of 2013.

The positive sentiment that this is a good time to make major purchases increased by 6 points this quarter and is the highest ever seen since 2008. The negative sentiment dropped by 7 points when compared to levels seen in third quarter of 2013.

More than a quarter (21%) of Canadians say they are better off financially compared to a year ago, while only 18% say they are worse off. A comparison with levels seen in third quarter of 2013 reveals that the worse off proportion hasn’t changed at all while the proportion of Canadians doing better has gone up by 4 points.

  Better off a year from now Worse off a year from now
One year outlook 27% 11%
  Better Canadian Economy Worse Canadian Economy
1 year economic outlook 18% 14%
  Better Canadian Economy Worse Canadian Economy
5 year economic outlook 48% 36%
  Good time Bad time
Making a purchase 55% 24%
  Better off than a year ago Worse off than a year ago
Compared to a year ago 21% 18%

Worse off a year from now One year outlook 27% 11% Better Canadian Economy Worse Canadian Economy 1 year economic outlook 18% 14% Better Canadian Economy Worse Canadian Economy 5 year economic outlook 48% 36% Good time Bad time Making a purchase 55% 24% Better off than a year ago Worse off than a year ago Compared to a year ago 21% 18%

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Data was collected using computer assisted telephone interviewing (CATI) via the Nielsen Consumer Insights teleVox omnibus. Overall, 2,074 completes were collected nationally between August 21st and September 2nd, 2014. The sample consists of 80% landline and 20% cell phone respondents, with quotas by gender (50/50 split) and by region. The data is weighted in tabulation to replicate actual population distribution by age and gender within region according to the 2011 Census data. This survey is considered accurate to a margin of plus or minus 2.2 per cent, 19 times out of 20.