Canadian consumer sentiment climbed to the highest in more than two years as employment rose and the housing market remained buoyant, according to the new Bloomberg Nanos Canadian Confidence Index.
The index, a weekly measurement of the economic mood of Canadians, rose to 59.75 in the period ended Sept. 27, from 59.23 the previous week. That’s the highest since March 2011 for the index, which tracks consumers’ perceptions of the strength of the economy, job security, real estate and their financial situation.
“September remains above average in terms of positive consumer sentiment in Canada,” said Nik Nanos, chairman of Nanos Research Group, the Ottawa-based polling company.
The data reflect recent improvement in economic reports. Job security among Canadians rose this month after Statistics Canada reported Sept. 6 that the economy added 59,200 jobs in August, the second highest total this year. Data this month also have shown the number of Canadians receiving jobless benefits is falling.
“Modest improvements in housing finances and the Canadian labor market are the primary factors for the best reading of the index in over a year,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.
The index has two sub-indexes: the Bloomberg Nanos Canadian Pocketbook Index on personal finances, and the Bloomberg Nanos Expectations Sub-index on future views. The data in the indexes date to 2008 and is based on phone interviews with 1,000 consumers, using a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points.
The Pocketbook Index, based on survey responses to questions on personal finances and job security, rose to 61.37 from 60.55. The difference between the share of Canadians who report their jobs are secure and those saying they’re not secure rose to 59.1 percentage points last week, the most since March 2011.
The expectations index, based on surveys for the outlook for the economy and real estate prices, rose to 58.13 from 57.91 as more Canadians predicted home prices would rise.
The improvement in attitude comes as the Bloomberg Consumer Comfort Index, a separate gauge of consumer sentiment in the U.S., rose for a third straight week.
Canada’s economy grew at its fastest pace in two years in July, Statistics Canada reported today, with the 0.6 percent advance reversing the prior month’s drop.
The country’s output is poised to accelerate at a 2.1 percent pace from July to September, after slowing to 1.7 percent in the second quarter, according to Bloomberg economist surveys.
Concerns that Canada’s housing market will cool rapidly are dissipating. Canadian home sales rose 2.8 percent in August from the previous month, the Canadian Real Estate Association reported Sept. 16. Sales have increased for six consecutive months at an average pace of 2.3 percent, the most since January 2011.
The Bloomberg Nanos gauge of Canadians’ view on real estate strengthened this month, with 38.1 percent polled predicting increased real estate values in their neighborhoods, up from as low as 34.5 percent in August. Twenty-one percent of those surveyed said they are better off financially over the past year, the highest reading since June.
The youngest age groups, and lowest income earners, are showing among the biggest confidence gains, according to the polling results. Consumers in Ontario led gains over the past week for the Bloomberg Nanos index.
Statistics Canada reported last week the nation’s retailers boosted sales in July by 0.6 percent, adding to evidence the nation’s economy is rebounding.
Statistics Canada also reported today that industrial product prices rose 0.2 percent in August, while raw materials prices increased 0.9 percent.
Elsewhere in the economy, Bank of Canada Senior Deputy Governor Tiff Macklem will give a speech tomorrow in Toronto on “Global Growth and the Prospects for Canada’s Exports.”
Western University in London, Ontario will release its Ivey Purchasing Managers Index for August at the end of the week, with economists forecasting a reading of 53.5 from 51 in July.