Canadian consumers are increasingly worried about the economy, according to TNS Canadian Facts’ monthly survey. But the figures suggest that consumers are anxious rather than alarmed.
The overall Consumer Confidence Index dipped to 96.5 in July from 97.8 in June, continuing a slide that began late last year. The index has fallen a substantial 11.5% since reaching a record high of 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 how well Canadians think the economy and employment are doing, stood at 106.4 in July. That was down significantly from 110.1 the previous month, and a big drop from the record of 122.8 set last November.
“Waning consumer confidence is further evidence of softening domestic demand, and bad news for Canadian business,” says Richard Jenkins, who directs the monthly tracking study as vice-president of the Toronto-based market-research firm. “Although confidence has not completely evaporated, we expect more and more consumers to retreat from making major purchases and scale back discretionary spending,”
Despite the darkening mood, there’s no sign that consumers expect the economy to drop off a cliff. In fact, one of the survey’s indexes was up slightly in July. The Expectations Index—which measures how well consumers expect the economy, household income and employment to be faring six months from now—was at 94.4 in July, versus 92.4 in June. Still, that’s well below last November’s level of 103.6.
The Buy Index, which gauges the degree to which people think now is a good time to make major purchases, slid to 85.6 in July, down marginally from 86.8 in June. It’s also significantly below its level of 95.9 from last November. Just 29% of Canadians think this is a good time to make a major purchase.
For this survey, TNS Canadian Facts interviewed 1,015 nationally representative Canadian adults between July 14 and 17. The margin of sampling error for a survey this size is plus or minus 3.1%, 19 times out of 20.