Canada Consumer Confidence Rises for Fourth Straight WeekAndrew Mayeda
Consumer sentiment in Canada rose for a fourth week to the highest in three months as optimism about job security and real-estate prices increased.
The Bloomberg Nanos Canadian Confidence Index climbed to 59.2 in the week ending March 7, from a prior reading of 58.6. Optimism increased in all four categories of the index, including views about personal finances and the national economy, according to the survey-based measure.
Bullish consumers are helping drive growth in the world’s 11th largest economy as governments pare spending to eliminate deficits. Canada’s gross domestic product unexpectedly accelerated in the fourth quarter as consumers spent more on clothing and energy, Statistics Canada reported Feb. 28.
The Bank of Canada noted signs of faster growth and inflation March 5 as it kept its main interest rate unchanged at 1 percent. The central bank projects the nation’s economy will return to full capacity over the next two years as strengthening demand from the U.S. boosts exports and encourages businesses to invest.
The four-week rise in confidence has coincided with a 4.5 percent increase in the Standard & Poor’s/TSX Composite Index, the country’s main equities benchmark. Sentiment improved last week even as Statistics Canada reported that employment fell by 7,000 in February, as governments cut 50,700 workers.
“Canadian consumer confidence has more or less followed trends in Canadian equity prices, which in the latest week reached their highest point in two years,” said Joseph Brusuelas, senior economist with Bloomberg LP.
The proportion of survey respondents who describe their job as secure rose to 52.1 last week, the highest since the end of 2011 and up from 51.2 the week prior.
The share who think real-estate prices will increase over the next six months climbed to 39.4 from 37.7. Record Canadian housing intentions led a faster-than-expected gain in building permits in January, Statistics Canada reported March 6, while housing starts rose for the first time in four months in February, Canada Mortgage & Housing Corp. said today.
“The positive movement in Canadian consumer confidence this week has been driven by improved perceptions of job security and perceptions of the value of real estate.” said Nanos Research Group Chairman Nik Nanos.
Those who reported improving personal finances over the last year rose to 21.9 percent of respondents last week from 21.4, while the proportion who think the national economy will strengthen over the next six months climbed to 20.0 from 19.6.
Confidence increased in every region except the Prairies, which includes the oil-rich province of Alberta. Sentiment improved in all age groups except those older than 50. Results were mixed across income categories.
Bloomberg Nanos’s confidence index has two sub-indexes: the Pocketbook Index, based on survey responses to questions about personal finances and job security, and the Expectations Index, based on responses on the outlook for the economy and real-estate prices.
The Pocketbook Index rose last week to 62.1 from 61.3 and the Expectations Index rose to 56.4 from 55.9.
The 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.