Canada Consumer Confidence Steady as Sting of Oil Shock Subsides

Damage from a drop in oil prices was balanced last week by more optimism the economy is on the mend, leaving Canadian consumer confidence little changed.

The Bloomberg Nanos Canadian Confidence Index fell to 56.6 in the week ending June 19, from 56.7 previously, according to polling by Nanos Research Group. That compares with an average reading this year of 55.7.

The Expectations sub-index, based on responses about the outlook for real estate and the national economy, reached the highest since the middle of December at 53.4. The Pocketbook sub-index, based on responses about job security and personal finances, fell to the lowest since mid-September at 59.9.

“The closing of the gap between the two sub-indices suggests a post-oil-price-drop realignment may be taking place in terms of economic sentiment,” said Nanos Research Group Chairman Nik Nanos.

Bank of Canada Governor Stephen Poloz cut interest rates in January and in recent months has said positive forces such as cheaper gas at the pumps and non-energy exports will probably spur a rebound in the second quarter. Falling crude oil prices triggered the biggest economic contraction since the 2009 recession between January and March as companies pared investment and the housing market faltered in Alberta.

The share of respondents saying the economy will be weaker in the next six months fell to the lowest since mid-December at 26.5 percent, the survey showed. The percentage saying home prices in their neighborhood will fall in the next six months was 14.5 percent, the lowest since the first week of January.

On the negative side, 17.9 percent of those surveyed said their personal finances had improved in the past year, the lowest since the middle of March.

The Nanos poll is based on a four-week rolling average of 1,000 responses taken in a random telephone survey. The results are considered accurate within 3.1 percentage points, 19 times out of 20.

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