Canadian consumers are feeling gloomy, and possibly fearful, about the economy, according to a new survey by TNS Canadian Facts, a Toronto-based market-research firm. Its overall Consumer Confidence Index dropped by 10.7 points in October after climbing for three months in a row despite the darkening world economic outlook.
“With the global crisis spreading north, it comes as no surprise that Canadians have now completely abandoned a rosy outlook,” said Richard Jenkins, who directs the monthly tracking study as vice-president of TNS Canadian Facts, in a release.
According to the survey, the overall Consumer Confidence Index hit a record low when it plummeted to 88.9, down from 99.6 in September and 109.0 last November. (All figures compare the current level of confidence against an index set at 100 for July 2004, when TNS launched the survey).
The Present Situation Index, which tracks Canadians opinions on the overall state of the economy and employment, stands at 96.9, down from 106.9 in September, a drop of 10 points. The Expectations Index, which measures consumers’ estimation of the economy, household income and employment in the next six months, declined significantly from 96.3 last month to 87.6 this month.
The biggest drop of all comes in the Buy Index, which gauges the degree to which people think it’s a good time to make major purchases. The index now sits at 79.4, compared with 93.0 in September.
“The decline in consumer confidence is a serious threat to the Canadian economy given the role that fear might play in scaling back consumer purchases over the busy retail season, but it is important to keep in mind that for most Canadians it is their employment income and prospects that define their financial health and these have not deteriorated in the same way as the stock market at this point,” said Jenkins.
For this survey, TNS Canadian Facts interviewed 1,015 nationally representative Canadian adults between October 6 and 9. The margin of sampling error for a survey this size is plus or minus 3.1%, 19 times out of 20.