Canada Consumer Confidence Extends Drop on Job Security
Canadian consumer confidence fell for the fifth time in six weeks as the nation’s economy struggles to build momentum, according to the Bloomberg Nanos Canadian Confidence Index.
The weekly measure of the economic mood of Canadians fell to 58.2 in the period ended Nov. 8, from 58.5 the previous week. The index has declined since touching 59.8, a two-year high, at the end of September.
Sentiment has yet to fully recover from effects of U.S. political gridlock last month. Concern that the global economy will take longer to recover is reducing feelings of job security among Canadians and offsetting news of an agreement in principle on a free trade pact with the European Union.
“As Canadians shift their economic attention away from news on a European trade deal and news related to the U.S. debt ceiling debate towards the holiday shopping season, it will be critical to monitor sentiment over the next few weeks,” said Nik Nanos, head of Ottawa-based Nanos Research Group.
The share of Canadians who say their jobs are secure fell to 64.7 percent last week, from 65.3 the previous week, a drop of more than five percentage points since Sept. 20. Those who say their jobs are not secure increased to 13.1 percent, from as low as 10.6 percent Sept. 27.
The employment picture has been mixed in Canada. Statistics Canada reported Nov. 8 the economy created 13,200 jobs in October, the third straight monthly gain, and the jobless rate held steady at 6.9 percent, the lowest since 2008. On the other hand, the average pace of monthly job gains this year, at 12,600, is half last year’s pace. Wage growth has also slowed. Average hourly wages of permanent employees rose 1.7 percent in October from a year earlier, compared with an average 3 percent over the past decade.
One of the biggest areas of weakness has been manufacturing. Factory producers have cut 74,000 jobs this year, as manufacturing output and sales have been stagnant.
Statistics Canada will release manufacturing sales data for September on Nov. 15. Sales are down 2.1 percent since the end of 2011.
The housing market has been one of the strongest parts of the economy after years of support from low interest rates. Canadian housing starts in October rose to their highest level in five months, Ottawa-based Canada Mortgage & housing Corp. said on Nov. 8.
The total value of purchases in six major Canadian real estate markets that have reported so far this month rose 29.7 percent to C$8.6 billion ($8.2 billion) in October compared with the same month a year earlier, according to data compiled by Bloomberg News from regional real estate boards last week.
The Canadian Real Estate Association will release aggregated national data on Nov. 15.
The share of people who said they expect real estate values in their area to rise has averaged 37.9 percent over the past four weeks, more than two percentage points above the average for all of 2013. The measure fell to 37.4 percent last week from 38.6 percent the previous week.
The Bloomberg Nanos Canadian Confidence Index has two sub-indexes: the Bloomberg Nanos Canadian Pocketbook Index on personal finances, and the Bloomberg Nanos Expectations Index on future views. The data in the indexes date to 2008 and 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.
The Expectations Index, based on surveys about the outlook for the economy and real estate prices, fell to 57.3 from 57.5, according to the Nanos report.
The Pocketbook Index, based on survey responses to questions about personal finances and job security, fell to 59.1 from 59.5.
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