Prairie Oil Swoon Drags Canada Confidence Gauge to 11-Week Lowby
Sentiment on Prairies including Alberta at lowest since 2008
Bloomberg-Nanos survey shows more pessimism on jobs, housing
Canadian consumer sentiment declined for a fourth week as plunging crude prices left Prairie households the least optimistic since the credit crisis.
The Bloomberg Nanos Consumer Confidence Index, based on weekly telephone polling, fell to 55.3 through Dec. 11, the lowest since September, from 56.2 in the prior period. The measure for the prairie provinces Alberta, Saskatchewan and Manitoba fell to 47.6, the lowest since 2008, and coincides with the last time crude was this cheap.
“The renewed decline in oil prices and a more broad-based sag in commodities have cast a darker cloud over the Canadian growth outlook heading into 2016,” Doug Porter, chief economist at BMO Capital Markets in Toronto, wrote in a research note Friday.
Consumers were inundated last week with dreary headlines: the nation’s dollar fell to an 11-year low against the greenback on signs the Organization of Petroleum Exporting Countries won’t seek to boost oil prices; Bank of Canada Governor Stephen Poloz laid out guidelines in case another major economic shock forces him to move to negative interest rates; and Prime Minister Justin Trudeau declined to restate his promise to cap budget deficits at about C$10 billion a year.
Canada has the world’s third-largest pool of oil reserves, the bulk of which are situated in Alberta, and companies there are canceling projects and firing workers as crude falls below $35 a barrel. November labor data from the federal statistics agency showed Alberta’s unemployment rate exceeded Ontario’s for the first time since 1994.
Concern the commodity slump will crimp economic growth isn’t limited to the Prairies. The share of Canadians who said the economy will be stronger in six months fell 3 points to 22.4 percent, the lowest since mid-October. Those who see it weakening rose the most since July, by 5.5 points to 35.3 percent.
The Nanos data also show diminished sentiment about the labor market. The 47.2 percent of respondents who felt their jobs were secure was the lowest reading since July.
Nanos Research produces the weekly confidence index from questions on personal finances, job security, the outlook for the economy and real estate prices. The survey is based on phone interviews with 1,000 people and uses a four-week rolling average of 250 respondents. The results are considered accurate to within 3.1 percentage points, 19 times out of 20.