After February’s sharp decline in consumer confidence, Canadians are slightly less concerned about the future this month, according to TNS’s Canadian Consumer Confidence Index for March. The Index, which tracks Canadian attitudes about the economy each month, reports a gain of a single point, edging back up to 96.5 after falling from 99.1 to 95.5 in February.
“Canadians’ confidence in our economy experienced a slight bounce in March after a very hard fall in February,” explains Norman Baillie-David, senior vice president of TNS in Canada and director of the marketing and social research firm’s monthly tracking study. “The slight increase tends to be more reflective of a collective uncertainty as to what’s going to happen next, as opposed to more optimistic thinking for the future.”
He adds that this month’s results demonstrate that Canadians have mixed feelings. “They’re feeling better about their situation right now but aren’t sure about what’s coming down the pipe,” he says. “Many of those who felt very pessimistic last month, bringing the index down, have taken a deep breath and seen that February’s bad economic news hasn’t affected them personally all that much. But they’re reserving judgment for the future.”
The present situation index, which measures how people feel about the economy right now, plunged almost six points in February. However, in March it showed the most significant recovery of the sub-indices, gaining back 3.4 points and rising from 93.9 to 97.3.
The expectations index, which measures people’s outlook for the economy six months from now, remained relatively unchanged again in March, dropping 0.7 points from 101.8 to 101.1 (which should be interpreted as no drop at all in statistical terms, notes the report).
After dropping 3.6 points in February, the buy index, which measures the extent to which Canadians feel that now is a good time to purchase a big-ticket item, such as a car or a major household appliance, also remained flat in March.
“Canadians are holding their cards close to their chest with regards to their spending plans,” adds Baillie-David. “This may be a worrying sign for the consumer durables and home renovation retail sectors, as spring usually tends to lift spirits as Canadians buy new homes and/or spruce up their existing homes with new appliances and home renovation projects.”
Earlier in the month, the Conference Board of Canada’s consumer confidence index was down, though polling results did show that consumers were feeling more optimistic about making major purchases. Baillie-David says the way Canadians react to the recent federal budget will be crucial for consumer confidence going forward.