Canada Economic Gloom Drags Household Confidence to 12-Week Low

Canada’s consumer optimism is shrinking along with the size of its economy.

The Bloomberg Nanos Canadian Confidence Index fell to 56.1 in the week ended July 10, down from 56.6 in the prior survey and the lowest since April 17. The most recent decline occurred over the same week as government reports showed falling exports, employment and building intentions in the world’s 11th-largest economy, which has seen its gross domestic product contract in the first four months of the year.

“Consumer sentiment on both the future strength of the Canadian economy and the value of real estate realized negative pressure in the last week,” said Nanos Research Group Chairman Nik Nanos.

Canada’s economy probably fell into a recession in the first half of the year because of damage from the drop in crude oil prices, Toronto-Dominion Bank said July 6. The distress may lead Bank of Canada Governor Stephen Poloz to cut his key interest rate for the second time this year on July 15, a separate Bloomberg economist survey shows.

The percentage of survey respondents who said the economy will be stronger in year declined to 14.1 percent, the lowest since March, from 15.4 percent in the prior week. The share of those calling for higher home prices in six months fell to 37.3 percent, from 38 percent.

The overall index’s second weekly decline moves it further away from the 2015 high of 56.9 set on May 22.

The Expectations measure, based on responses about the outlook for real estate and the national economy, reached the lowest since mid-May, falling to 51.8 from 52.9. The survey’s Pocketbook gauge, calculated from responses to questions about job security and personal finances, was little changed at 60.4, versus a 12-month average of 61.