Biggest Drop in Job Security in 3 Months Dents Canada Confidenceby
Bloomberg Nanos consumer sentiment is below 12-month average
Confidence on prairies remains low amid job cuts in oil patch
Canadian consumer sentiment fell, as fewer people reported feeling secure about their jobs, telephone polling showed.
The broad Bloomberg Nanos Canadian Confidence Index declined to 53.4 in the week ending March 4, from 53.6 previously and compared with the 12-month average reading of 55.1. The share of people describing their jobs as “secure” fell by 1.6 points to 51.8 percent, the biggest drop in three months.
“Perceptions related to job security -- a measure which is traditionally quite steady -- realized downward movement over the past week and merits monitoring,” said Nik Nanos, chairman of Ottawa-based Nanos Research Group. The fall in job security was also reflected by the increased share of respondents -- to 7.7 percent, from 6.4 percent -- who described their jobs as “not at all secure.”
Confidence remains lowest in the prairie region, including Alberta where energy companies are still cutting jobs in response to the collapse in crude oil prices to about $36 a barrel from more than $100 in 2014. Spanish oil producer Repsol SA said last week it’s reducing its workforce in Canada’s oil patch by 10 to 15 percent, declining to give a specific headcount, with China’s Nexen Energy unit also announcing 120 job cuts.
The national unemployment rate increased to a two-year high of 7.2 percent in January. Statistics Canada will provide the February figure on Friday. Economists in a Bloomberg survey expect unemployment to be little changed over the next year, with a median estimate of 7.1 percent in the first quarter of 2017.
The Nanos survey also showed an uptick in economic pessimism: 37 percent of respondents said they felt the economy would weaken in the next six months, versus 36.6 percent previously. The share of those who see it strengthening dropped to 20.3 percent, from 20.6 percent.
At the same time, optimism about home prices increased, with 32.8 percent saying real estate values in their neighborhood will rise over the next 12 months, versus 32.3 percent the week before, and 20.4 percent saying they will fall, from 20.6 percent.
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.