Surge in Canada's Consumer Confidence Leaves Oil-Patch Behindby
Index registers 8th straight increase, longest since 2013
The gauge shows decreases in sentiment on oil-rich Prairies
Canadian consumer optimism has surged in the two months since Justin Trudeau’s Liberals took a lead in the polls, and is now at the highest in more than a year.
The Bloomberg Nanos Consumer Confidence Index gained for an eighth-straight week, telephone polling shows, the longest string of gains since May 2013 when Nanos Research began weekly reporting of its telephone survey. Sentiment is surging everywhere except in the prairie provinces, where companies are cutting jobs and reining in investment to cope with persistent weakness in oil prices.
"Forward looking views of the strength of the Canadian economy continue to climb,” and sit well above the 2015 average, Nanos Research Group Chairman Nik Nanos said. "Since mid-September, perceptions that the Canadian economy will strengthen in the next six months have almost doubled," Nanos said.
The share of those who expect overall growth over the next six months now sits at 29.2 percent, with 21.3 percent of respondents expecting the economy to weaken.
Nationally, confidence climbed to 58.6, the highest level since October 2014. British Columbia continues to show the highest optimism, with Ontario and Quebec also registering gains. Trudeau went on to win a majority mandate on Oct. 19, with a promise to run budget deficits to build transportation and other infrastructure.
The pocketbook sub-index, based on personal finance and job security, rose to 59.7, its fourth consecutive week of growth. The expectations sub-index, based on opinions about the economy and real estate, rose to 57.6, increasing for a 10th week.
Consumer confidence in Canada’s energy-rich prairie provinces has resumed its slide, bucking the national trend. Prices for crude oil dropped to $40.67 a barrel, down from more than $100 in June 2014. The Bloomberg Nanos Consumer Confidence Index in Alberta, Saskatchewan and Manitoba slid to 53.1.
While economic expectations continue to grow, sentiment around the housing market cooled slightly. The share of those expecting homes in their neighborhood to increase in price fell to 34.8 percent, from 35.1 percent a week earlier, while those expecting a decrease in value rose to 12.5 percent from 11.7 percent.
For the index, Nanos Research conducts weekly polling of 250 people, using a four-week rolling average totaling 1000 respondents to produce the results. The numbers are considered accurate within 3.1 percentage points, 19 times out of 20.