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Quebec Consumer Sentiment Falls Most in Year on Election

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April 7 (Bloomberg) -- Consumer confidence in Quebec fell the most in more than a year last week, as the election campaign that’s raised the prospect of separation in the French-speaking province draws to a close, while sentiment in Canada as a whole was little changed.

The Bloomberg Nanos Confidence Index for Quebec fell to 54.4 from 56.6 last week, the largest decline since February 2013. The index for Canada moved up to 58.1 from 58.0.

Opinion polls suggest the separatist Parti Quebecois, led by Pauline Marois, may lose the election today to Philippe Couillard and the Liberal Party, which advocates remaining within Canada. While surveys showed Marois entered the campaign with a lead, that support dropped after the sovereignty issue became prominent.

“One of the main issues of the campaign has been speculation on a future Quebec referendum,” said Nik Nanos, chairman of Nanos Research Group. “It is likely that this has had a chill-effect on consumer confidence.”

Sentiment rose in western Canada and Ontario last week, and fell in the less populous Atlantic provinces east of Quebec.

Nationally, the Nanos Expectations Index, which is based on the outlook for the economy and real estate prices, rose to 56.5 from 56.1 last week, the highest since Jan. 17.

Signs of an strengthening Canadian economy last week included a 0.5 percent rise in gross domestic product for January, a surplus in merchandise trade in February and faster-than-forecast job creation in March. Real estate brokers in Vancouver and Toronto said last week that prices and sales rose in two of Canada’s three biggest cities last month.

‘Stands Out’

“Canada really stands out in the world as having kept its population employed,” Toronto-Dominion Bank Chief Executive Officer Ed Clark said in an interview following the bank’s annual meeting in Calgary April 3. Consumer confidence won’t see “a negative development unless unemployment rates start to back up.”

Quebec’s economy also showed improvement last week, with the provincial jobless rate falling to 7.6 percent from 7.8 percent. The Canadian jobless rate fell to 6.9 percent from 7.0 percent.

“Improved labor market conditions and solid gains in hiring likely bolstered Canadian consumer sentiment,” said Joseph Brusuelas, senior economist with Bloomberg LP in New York.

Dollar, Bonds

The improvement in national sentiment was tempered by a decline in the Nanos Pocketbook Index, which is tied to personal finances and job security. The measure fell to 59.6 from 59.8, marking the fourth straight weekly decline.

Nanos data are based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents. The results are accurate within 3.1 percentage points, 19 times out of 20.

Investors grew more inclined to hold Quebec bonds and the Canadian dollar during the campaign amid signs that the separatist Parti Quebecois could lose the campaign. Canada’s dollar traded for C$1.0976 per U.S. dollar at 11:02 a.m. today in Toronto, 0.5 percent stronger than before the campaign began March 5.

Yields on 10-year Quebec bonds dropped to 3.38 percent today, from 3.43 percent the day before Marois called the election, according to data compiled by Bloomberg.

A Leger poll published April 4 by the Journal de Montreal newspaper showed the Liberals with 38 percent support, compared with 29 percent for the PQ and 23 percent for the CAQ. Both the economy and public finances ranked ahead of identity issues and a possible referendum in terms of importance, the poll showed. The online survey of 1,220 respondents was taken April 2 and April 3. No margin of error was reported.

To contact the reporter on this story: Greg Quinn in Ottawa at

To contact the editors responsible for this story: Paul Badertscher at Chris Fournier

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