Consumer Confidence Falls on Economic Concern
Canadian consumer confidence fell sharply in the third quarter, due almost exclusively to concerns about the both the short and long term health of the economy. In August, the index stood at 77.5, down from the 83.7 recorded in the last quarter. Despite the decline, one-in-four Canadians feel they will be better off financially a year from now – the same number as three months ago. Meanwhile, in the US, consumer sentiment fell even further, dropping to 55.7.
- In total, 25% of Canadians believe they will be better off financially a year from now. Conversely, 14% feel they will be worse off a year from now. In June, this split was 25%-15%.
- Just over one in ten Canadians (13%) sees good times ahead for the economy in the next twelve months. Conversely, 27% see bad times over this same period. These numbers represent a reversal from what was recorded in June, when 24% saw good times ahead for the economy, and 13% expected bad times.
- Almost half (49%) believe there will be good times financially for the Canadian economy in the next 5 years, while 37% believe there will be unemployment and recession over this period. This split was 56%-30% in the last wave.
- Slightly less than half (45%) believe that now is a good time to make a major purchase. Nationally, 39% believe it is a bad time to make such a purchase. In February, this split was 49%-33%.
- In terms of how people perceive the last year, 17% indicated they were better off financially compared to a year ago, while 22% feel they are worse off.
According to Senior Vice-President Doug Anderson “For the second quarter in a row, Canadian consumer confidence has declined. One thing that is particularly interesting is how the Canadian confidence trend compares to the US trend over the past few years. When US consumer confidence has declined, Canadian confidence has typically declined as well, although usually to a lesser degree and sometimes on a delayed basis. Holding true to this observed trend, it appears that Canadian confidence is currently moving in the same direction as US confidence, but not nearly as dramatic a change.
“Canadians are well advised to take a longer term view at times when the short term picture is clouded by volatility,” said Jack Courtney, Assistant Vice-President of Advanced Financial Planning at Investors Group. “Historically stock markets recover from periods of uncertainty and Canadians should strive to keep their focus on their own long term objectives.”
These data were gathered through teleVox, the company’s national telephone omnibus survey for two weeks from August 18 and August 29, 2011 for just over 2,000 completes. A sample of the same size has a margin of error of 2.2%, 19 times out of 20.