Canadians Outside Alberta Are Showing Signs of Economic Optimism

  • Consumer sentiment on prairies dips to lowest since 2008
  • Bloomberg Nanos confidence data support Poloz's growth view

As long as they’re not living on the prairies, Canadians aren’t letting the oil price shock get them down.

Every region outside the three prairie provinces -- Alberta, Saskatchewan and Manitoba -- is on pace to finish the year with higher household confidence compared with last year, according to weekly telephone polling by Nanos Research, even after the country’s economy contracted in the first two quarters, and growth remains tepid.

The Bloomberg Nanos Consumer Confidence Index for Ontario last week rose to 59.1, compared with 56.3 at the end of 2014 and an average through 2015 of 58.2. Confidence levels in British Columbia, the Atlantic region and Quebec are similarly above those at the end of 2014 and at or above 2015 averages.

Confidence on the oil-rich prairies, meanwhile, is at the lowest since 2008. The reading of 46.1 compares with the 2015 average of 52.4. The gap with Ontario, at 13 percentage points, is the most since Nanos began tracking the data in 2008.

National Reading

The national confidence reading of 55 is roughly in line with where it was at the end of last year and the 2015 average.

The results support the view of policy makers including Bank of Canada Governor Stephen Poloz that the commodity shock’s impact is mostly confined to oil-producing regions, while a weaker currency and low borrowing costs mitigate the effects in the rest of country. Poloz predicts growth will accelerate next year, even as the oil slump deepens. West Texas Intermediate traded below $35 a barrel Monday.

Finance Minister Bill Morneau is meeting his provincial counterparts in Ottawa to discuss economic growth and job creation. Poloz will give a private presentation on the global economy and Canada’s monetary policy to the ministers, who are scheduled to hold a press conference at 3:30 p.m.

Confidence measures aren’t the only indicators showing that outside Alberta, the country’s economy, while hardly stellar, is doing alright. The unemployment rate in Quebec has been unchanged this year and dropped in Ontario even as it increases more than two percentage points in Alberta.

A slew of other indicators -- from housing starts to wholesale shipments to retail sales -- look better when Alberta is excluded.

Adding to the province’s woes is the fact it currently has one of the highest inflation rates in the country, as the government increases taxes to shore up finances. Alberta’s inflation rate was 2 percent in November, versus 1.4 percent nationally.

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 national results are considered accurate to within 3.1 percentage points, 19 times out of 20.

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