Canada Consumer Confidence Rebounds After One-Week Brexit DropBy
Personal finances indicators improve in weekly phone survey
Bloomberg Nanos sentiment gauge remains above 2016 average
A post-Brexit slump in Canada consumer confidence was short-lived, as optimism rebounded last week on stronger personal finance indicators.
The Bloomberg Nanos Canadian Confidence Index rose to 57 from 56.7 a week earlier, remaining above the 2016 average of 55.2, telephone polling showed. The previous week’s drop, the largest since July 2015, was fueled by market turmoil over the U.K.’s vote to leave the European Union.
The rebound was driven by the pocketbook sub-index, which measures perceptions of job security and personal finances and rose to 58.4 from 57.8 a week earlier. The expectations sub-index, measuring the outlook for home prices and the Canadian economy, was little changed.
Confidence rose in the country’s two most populous provinces, Ontario and Quebec, and in its energy-producing prairie region. It fell in British Columbia, although the measure in that province remains above the 2016 average.
“Employment in Ontario and British Columbia is holding its own,” said Robert Lawrie, a New York-based Bloomberg economist. He added a recent Bank of Canada survey suggests “those trends are likely to continue, with business optimism centered outside the energy region and in the service sector.”
The share of those who say their personal finances have improved over the past year rose to 15.2 percent from 13.7 percent a week earlier, while the share of those whose personal finances worsened fell to 27 percent from 28 percent a week earlier.
The share of those who say their employment is secure or somewhat secure rose to 65.6 percent, from 65.4 percent a week earlier. It remains below the 2016 average of 68.3.
While overall confidence rebounded, the share of those optimistic about the Canadian economy continued to slide. Just 23 percent of respondents expect the Canadian economy to strengthen over the next six months, down from 23.7 a week earlier and 26 percent in the week that included the Brexit vote.
The Bloomberg Nanos Canadian Confidence Index is based on telephone polling with a rolling four-week average of 1,000 respondents. It’s considered accurate within 3.1 percentage points, 19 times out of 20, with larger margins of error for regional breakdowns. The latest round of polling ended July 8.