Boost in Canada Economic Outlook Increases Consumer Confidenceby
Broad index of household sentiment reaches highest this year
Expectations for nation's real estate market also improving
Canadian consumer confidence has rebounded to levels not seen since Christmas, buoyed by higher hopes for the Canadian economy overall, telephone polling shows.
The Bloomberg Nanos Consumer Confidence Index rose to 54 last week, from 53.4 a week earlier. It was the highest level since late December, and comes after the Bank of Canada left the key lending rate unchanged, and as Prime Minister Justin Trudeau prepares to unveil his first budget next week.
The change was driven entirely by the expectations sub-index, a measure of consumers’ views on the prospects for the economy and real estate, as opposed to sentiment about personal finances and job security.
The expectations sub-index rose to 50.2, with more respondents expecting the economy to grow and home prices in their neighborhood to rise. The sub-index crossed into "net positive" territory -- a score of 50 or above -- for the first time since December, Nanos Research Group Chairman Nik Nanos said.
Canadians expectations for housing grew, with 34.2 percent expecting an increase in prices in their neighborhood over the next six months, up from 32.8 percent a week earlier. The share expecting a price decrease fell to 18.6 from 20.4 a week earlier.
The expectations sub-index increased in every region except Atlantic Canada. Readings were highest in British Columbia, at 59.5, followed by 58.3 in Ontario, the country’s most-populous province. Ontario’s overall consumer confidence rose to 58.9, the highest in the country and, again, the highest since December.
Although rising, the confidence index is still below the 12-month average of 55. Canadians may be waiting to see whether a government program of fiscal spending, to be detailed in the March 22 budget, will have the promised effect of creating growth.
"While expectations are moving higher, households appear to be waiting for a clear sign that policymakers can provide a quick response to further labor-market displacements," Robert Lawrie of Bloomberg Economics said.
The outlook on personal finances in Canada is mixed. The share of those who say their personal finances are better off than they were a year ago rose to 14.8 percent, compared with a 12-month average of 17.4. Those who say their job is secure or somewhat secure slid to 69.1 percent from 69.3 a week earlier. The overall pocketbook sub-index stayed steady at 57.8, unchanged from a week earlier and below the 12-month average of 59.5.
The Bloomberg Nanos Consumer Confidence Index is based on a four-week rolling average of phone interviews totaling 1,000 respondents, and is considered accurate within 3.1 percentage points, 19 times out of 20. The latest figures are based on polling that ended March 11.