Virus Resurgence Sends Canadian Confidence Lower for Third Week

(Bloomberg) -- Consumer confidence is taking a hit in Canada after a second wave of Covid-19 prompts renewed restrictions on businesses and social gatherings.

The Bloomberg Nanos Canadian Confidence Index, a composite measure of financial health and economic expectations, dropped more than half a point to 51.9 in the week ended Oct. 16. The third-straight decline brought the index to the lowest since mid-August.

The dip in sentiment comes one week after Canada’s most-populous province -- Ontario -- forced some of its cities back into so-called Stage 2 restrictions, banning indoor dining and shutting gyms and movie theaters for at least 28 days, as new infections reached a record. Quebec had already imposed similar rules in virus hot-spots Montreal and Quebec City.

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.

Key Insights

• The outlook for the Canadian economy -- one subcomponent of the index -- has deteriorated in recent weeks amid the Covid-19 surge. Only 14% of respondents believe the economy will be stronger in the next six months, the lowest level since the end of May
• Real estate sentiment remains robust, reflecting recent data that indicate sales and prices across the country remain strong. About 43% of respondents expect the value of real estate in their neighborhood to increase over the next six months, though that’s down slightly from the post-pandemic high from two weeks ago
• Views on job security and personal finances are little changed as the labor market continues its recovery, recouping about 75% of the 3 million jobs lost during the height of the lockdowns
• Sentiment dropped in all regions except Atlantic Canada. The biggest declines were in British Columbia and Ontario

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