Quebec Consumer Confidence Jumps on Separatists’ Defeat

Consumer sentiment in Quebec rose the most in more than nine months after the primarily French-speaking province voted out the separatist Parti Quebecois in an election last week.

The Bloomberg Nanos Confidence Index for Quebec climbed to 56.6 in the week ended April 11 from 54.4 the previous week, the biggest increase since June. Nationally, the survey-based index rose to 59.0 from 58.1, with confidence increasing in every region except British Columbia and the Atlantic provinces.

Quebec voters gave a majority mandate to the Liberal Party in the April 7 election after a campaign focused on fears the incumbent Parti Quebecois would seek another referendum on splitting from Canada. The Nanos data show perceptions about the prospects for the national economy and real estate prices improved.

“Although Ontario and the Prairies also posted confidence gains, the most dramatic one-weak gain was in Quebec,” said Nik Nanos, chairman of Nanos Research Group, in a statement released with the data. “With the new majority government in Quebec, speculation of a possible referendum to separate from Canada has been taken off the table.”

Led by neurosurgeon Philippe Couillard, the Liberals were elected in 70 of 125 seats, while the Parti Quebecois was reduced to 30. Premier Pauline Marois was defeated in her own district and announced she would step down as party leader.

While surveys showed Marois entered the campaign with a lead, support for her party dropped after the prospect of another referendum on independence became a prominent issue. Quebeckers voted to remain in Canada in 1980 and 1995.

Quebec Bonds

Yields on 10-year Quebec bonds were 3.34 percent today, from 3.42 percent the day Marois called the election, according to data compiled by Bloomberg. The Canadian dollar was 0.2 percent stronger at 9:20 a.m. in Toronto today, trading at 1.0960 per U.S. dollar, little changed from C$1.0967 the day before the vote.

Quebec’s economy showed improvement in March, with the provincial jobless rate falling to 7.6 percent from 7.8 percent, Statistics Canada reported April 4. The Canadian jobless rate fell to 6.9 percent from 7.0 percent.

The share of survey respondents who said the world’s 11th-largest economy will strengthen in the next six months rose to 22.8 percent, the highest since January, from 21.1 percent, while those who see it weaker dropped to 17.3 percent. Confidence increased about neighborhood real-estate prices, with the share of respondents who see higher values over the next six months rising to 39.8, the highest this year, according to the Nanos report.

‘Moderate Growth’

Consumer sentiment is “cautiously optimistic,” Louis Vachon, Montreal-based chief executive officer at National Bank of Canada, said in an April 10 interview after its annual general meeting in Calgary. National Bank is Canada’s sixth-largest lender by assets. “People expect moderate growth, moderate growth in employment and that’s what I see right now.”

The Nanos survey also found the share of people who see their jobs as secure fell to 45.9 percent, the lowest reading since January, from 47.0 percent the week before.

Statistics Canada will report factory sales for February on April 15, the day before the Bank of Canada releases its latest interest-rate decision, as well as its quarterly economic forecast.

Governor Stephen Poloz has said the central bank’s next move on interest rates will depend on whether economic data confirm his forecast that exports and investment will pick up as companies benefit from stronger U.S. demand and a weaker Canadian currency.

Bolstered Sentiment

“Expectations of modest economic growth have bolstered consumer sentiment,” said Joseph Brusuelas, senior economist with Bloomberg LP in New York.

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 was little changed last week at 59.6 while the Expectations Index climbed to 58.4 from 56.5.

The proportion of survey respondents who said their personal finances are better off over the past year dropped to 19.9 percent from 20.2 percent the previous week, according to the Nanos report.

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.

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