Canadian Confidence in Economy Rises From Two-Year Low, Nanos Poll Shows
The Nanos Economic Mood Index rose to 107.4 in the fourth quarter from 105.1 the prior three months, according to a report by Nik Nanos, president of the Ottawa-based polling company. About 19 percent of those surveyed said the economy will be stronger in the next six months, up from 16 percent, while the share who said it will be weaker declined to 31 percent from 39 percent.
“The pessimism Canadians have in terms of the future of the economy has lessened,” Nanos said, citing progress with “turmoil in Europe and the political gridlock in the U.S.”
The Bank of Canada is relying on consumption to account for almost two-thirds of economic growth this year, which Governor Mark Carney forecast in October will be 1.9 percent. The central bank also said housing will make no contribution to growth this year and warned last month that record consumer debt and Europe’s debt crisis are risks to Canada’s financial system.
The central bank today published a survey showing that executives are predicting (BCBSFUTR) slower sales growth for the first time in almost three years because of concern about fading global demand. The so-called balance of opinion for sales over the next year was negative 4 percentage points in the fourth quarter, down from plus 6 in the last survey.
“The weak U.S. economic outlook, concerns about adverse effects from the situation in Europe and an expected slowing in household spending were among the factors dampening sales prospects,” the Ottawa-based Bank of Canada said today in its quarterly Business Outlook Survey.
The Canadian dollar strengthened 0.1 percent to C$1.0273 per U.S. dollar at 11:49 a.m. Toronto time. One Canadian dollar buys 97.34 U.S. cents.
The Nanos poll showed more consumers said their economic situation had worsened over the past year than in the third quarter, while optimism about the future increased.
The Nanos Pocketbook Index, based on questions related to personal finances and job security, fell to 102.8 from 105.9. The Expectations Index rose to 113.0 from 104.1, the first gain in three quarters. The Economic Mood index is a composite of the Pocketbook and Expectations indexes.
Debt to Decline
Some 34 percent said their personal debt will decline in the next six months, versus 30 percent in the last report. Another 36 percent of Canadians predict their local real estate prices will rise in the next six months, up from 32 percent in prior report.
The average sales price for a Canadian home increased 7.5 percent in the first 11 months of 2011, according to data from the Canadian Real Estate Association.
Today’s reports also suggest that job security hasn’t been impacted by recent sluggishness in the labor market. The economy has generated (CANLNETJ) only 7,400 jobs over the last six months, leading to an increase in the jobless rate to 7.5 percent in December, according to Statistics Canada data released data Jan. 6.
According to the Nanos poll, the number of Canadians who believe their job is secure was little changed at 52 percent, while the Bank of Canada survey said the balance of opinion on hiring over the next year rose to 45 percent from 38 percent.
The Nanos poll of 1,201 Canadians was taken between Dec. 15 and Dec. 18 and has a margin of error of 2.8 percentage points. The central bank’s business survey polled about 100 executives from Nov. 14 to Dec. 14.
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.