Fears of Contraction Extend Slide in Canadian Consumer SentimentBy
Share of those expecting economy to shrink hits 9-month high
But 2-week decline in confidence is at odds with recent data
Canadian consumer confidence slid for the second week as the share of those expecting the country’s economy to shrink reached a nine-month high, telephone polling shows.
The Bloomberg Nanos Canadian Confidence Index fell to 56.3 from 56.5 a week earlier, driven by weakness in the sub-indicator measuring expectations for the overall economy.
The share of those expecting a contraction in the next six months rose to 32.1 from 30, the highest level since April. The share of those expecting the economy to strengthen fell to 20.8 from 23.
The two-week decline in confidence is at odds with the latest trade and labor data, as well as the Bank of Canada business outlook survey, Bloomberg economist Robert Lawrie said. “This disconnect might suggest households’ growing impatience with the speed of the fiscal stimulus as well as increased uncertainty during the formation of the new U.S. administration,” Lawrie said.
Prime Minister Justin Trudeau’s government took power 14 months ago on a mandate to cut middle-class taxes and spend billions more on infrastructure to drive growth. That infrastructure money is rolling out slowly, however.
The latest round of polling found improved sentiment on housing. The share of those expecting real estate values in their neighborhood to rise over the coming six months increased to 37.3 percent from 35.9.
The share who say their job is at least somewhat secure edged up to 68.4 from 68.3 a week earlier, the highest level since June of 2016.
Those who say their personal finances have improved over the past year rose to 17.1 percent from 15.7 percent a week earlier, while those who say their finances worsened edged up to 26.8 from 26.6. The share of those expecting no change fell to 54.6 from 56.1.
Regionally, Ontario -- the country’s most populous province -- continues to lead in consumer sentiment with a score of 59.2, down slightly from 59.3 a week earlier. It’s followed by Atlantic Canada at 58.5, Quebec at 56.7, British Columbia at 55.6 and the energy-producing Prairie provinces at 50.7.
The Bloomberg Nanos Canadian Confidence Index is based on a four-week rolling average of 1,000 respondents, and is considered accurate within 3.1 percentage points, 19 times out of 20. The latest round of polling concluded on Jan. 13.
— With assistance by Erik Hertzberg