Four Months Into Crisis, Consumer Confidence Stalls in Canada

(Bloomberg) -- Canadian consumer confidence remains fragile four months after Covid-19 lockdowns went into effect, telephone polling shows.

Sentiment around personal finances, job security and economic growth rebounded in May and early June from record lows, but those improvements have since stalled. Only a recovery in the outlook for real estate is keeping broader confidence levels outright declines.

The Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and economic expectations, ticked higher to 46.7 last week, after falling slightly the week before. The index has hovered around current levels since mid-June.

The numbers suggest consumer confidence has plateaued well below pre-pandemic levels. That’s consistent with warnings by the Bank of Canada that the rebound from the recession will be a slow and gradual. Sentiment collapsed four months ago after the country shut much of its economy, and has since made up only about half those losses.

Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security and their outlook for the economy and real estate prices. Bloomberg publishes four-week rolling averages of the 1,000 responses.

Survey Highlights

• Real estate sentiment is improving, in line with recent housing-market indicators that show a strong rebound in demand. The share of respondents anticipating price increases has more than doubled since May, to 24%. That’s the highest since the early days of the crisis, but still well below pre-pandemic levels averages closer to 40%
• Canadians are suddenly getting more pessimistic about the recovery. About 59% of respondents believe the economy will worsen over the next six months -- the highest share in five weeks. The gauge peaked at 80% in April
• Perceptions of personal finances have shown little recent improvement. The percentage of respondents who say they are better off financially than they were a year ago was 14% last week, a slight increase from 13% the week before. But those who say their finances have deteriorated also rose, to 38%, the most since mid-May.
• About 16% of Canadians say they feel insecure or somewhat insecure about their employment, largely steady over the past five weeks. That figure had peaked at 25% in April

©2020 Bloomberg L.P.