How Confident are Canadian Consumers?

Consumer confidence is up, or down, depending on whom you ask

Written by Kim Hart Macneill

Retailers hoping November’s consumer confidence numbers would help them forecast their sales holiday shopping season may find themselves confused. TNS, the Canadian arm of TNS Global research firm, and the Ottawa€“based Conference Board of Canada released their Consumer Confidence Indexes late last week, each painting different pictures of Canadian consumers’ attitudes. The TNS Index increased 0.9 points to 98.9, out of 100, the highest confidence level it reported since July 2011. Norman Baillie-David, director of the monthly tracking study and Ottawa-based senior vice-president, attributed much of the increase to President Obama’s win days before the Nov. 12-15 poll was conducted. “Despite all of the issues surrounding the fiscal cliff and Minister Flaherty’s economic doom and gloom statement, that’s not enough to override the feelings coming out of the election,” he said.

By contrast, the Conference Board’s Index showed a 0.8 point dip in confidence to 80.3, out of 100, driven largely by external factors, such as slow U.S. growth, European debt woes and domestic concern about rising consumer debt. The poll was conducted between Nov. 1 and 12.

“Canadians in general are pretty savvy, so they’re picking up on the fact that this is still a period of economic turmoil, even though here in Canada we’re doing relatively well,” says Todd Crawford, a Conference Board economist and author of the report.

Both surveys saw a decrease in the Buy Index, which asks how likely consumers are to make a big-ticket purchase. TNS’s Buy Index was down 1.7 points to 92.8, which Baillie-David says is consistent for November and December when consumers shift spending to Christmas gifts. Only 38.5% of Conference Board consumers said now was a good time to make a major purchase, down by 1.8 points from October. The share of respondents who said now is a bad time to make a major purchase- 49.9%- increased by 3.9 points.

Both reports found Canadians optimistic about the future.

The TNS survey saw a 2.8 point increase to 102.2 in the Expectation Index, which measures respondents’ economic outlook for the next six months.

The Conference Board Index saw a 1.1 point increase to 23.8% when it asked respondents if they expected their financial situation to improve in the next six months. Those who expected their finances to worsen, 14.5%, remained constant. Conference Board respondents’ confidence in the labour market also improved, with 17.5% expecting more jobs (up 0.8 points), and 19.6% predicting fewer jobs, the lowest level since the summer of 2011. Crawford cautions readers of the reports to look at the Indexes as a whole. “Our Index, although it’s up for the start of the year, is lower than it was in the summer, when the most recent round of economic weakness kicked off.  We more or less expect it to stay in the current region for the next few months.”

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