Nov. 25 (Bloomberg) -- Surging stock prices and a real-estate rally sent confidence levels to the highest in eight weeks, according to a measure of Canada’s economic mood.
The Bloomberg Nanos Canadian Confidence Index rose to 59.4 in the week ended Nov. 22, the highest since the end of September, from 59.0 during the previous period. The proportion of respondents who said they felt better off financially than a year earlier rose to the highest since January.
Ontario paced gains with citizens of the world’s 11th-largest economy feeling wealthier amid rising prices for equities and homes, even as the outlook for the economy remains mixed. Canada’s benchmark stock index is up 14 percent since touching a 2013-low on June 24, while the average sales price of a home sold in the country this year is up 4.6 percent, according to data provided by the Canadian Real Estate Association.
“The trend of improving consumer sentiment in Ontario could have a significant positive impact on the forward look of the Canadian economy,” said Nik Nanos, head of Ottawa-based Nanos Research Group.
The outlook in western provinces has deteriorated even as it increased in Ontario. Confidence in Canada’s most-populous province measured 61.1 last week, the highest since March 2010 and up from from 60.7 the previous week. Sentiment in Alberta, Saskatchewan and Manitoba fell for a second week to 63.1 from 63.7, as the prairie provinces grapple with tepid commodity prices.
A Bank of Canada commodity price index is down about 12 percent since touching a 2013 high on July 17. Western Canada Select Oil has declined almost 30 percent in that period.
Bloomberg Nanos’s confidence index has two sub-indexes: The Pocketbook Index, based on survey responses to questions about personal finances and job security, rose to 61.2 from 59.8. The Expectations Index, based on surveys about the outlook for the economy and real estate prices, fell to 57.7 from 58.2, according to the Nanos report.
The data are based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points.
Higher confidence may reflect a housing market that remains buoyant, dissipating concern price gains in some cities were unsustainable. Ontario home prices were up 8.1 percent in October from a year earlier, leading all provinces, the Canadian Real Estate Association said in a Nov. 15 report.
The share of Canadians who say they’re better off financially over the past year rose to 22.4 percent, from 20.1 percent last week, while those who say they are worse off fell to 23.1 percent, from 24.3 percent. The negative 0.7 percent difference between the two is the narrowest since at least 2008.
Respondents who predicted an increase in home values in their neighborhood rose to 39.9 percent, the most since March 2012, according to the Nanos polling. Confidence levels among homeowners climbed to a two and a half-year peak. Sentiment among those renting declined last week.
Indicators show the outlook for the economy and jobs may be weakening. The difference between those who expect output to strengthen and those who believe it will weaken narrowed to 2.7 percentage points last week, from 5.1 percentage points. A gauge of job security is down from early October.
Statistics Canada will release third quarter GDP data on Nov. 29, with economists forecasting growth will accelerate from 1.7 percent in the second quarter.
“With economists anticipating a jump in third-quarter Canadian annualized GDP growth to 2.5% and moderate growth in 2014-15, and considering the noteworthy jump in U.S. consumer expectations, one could expect Canadian expectations to follow suit,” said Joseph Brusuelas, senior economist with Bloomberg LP in New York.
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