The Index of Consumer Confidence rose 5.5 points in July after dropping sharply the previous month, says a report released Tuesday by the Conference Board of Canada.
Gustavo Fring
The report’s key findings include:
- During July, the Consumer Confidence Index rose to 73.6, showcasing a noteworthy upswing from the previous month.
- Respondents demonstrated a more positive perception of their current financial situation in July. An increase of 0.8 percentage points resulted in 13.2 per cent of respondents believing their finances had improved. Conversely, the proportion of individuals perceiving their finances to be unchanged declined slightly by 0.1 percentage points, though it still constituted the majority at 51.4 per cent. Meanwhile, the number of respondents who considered their financial situation to have worsened also decreased by 0.3 percentage points, settling at 32.9 per cent.
- Regarding future financial outlooks, there was a moderation in optimism. The percentage of respondents expecting an improvement in their finances fell by 0.4 points, while those anticipating a decline reduced by 2.4 percentage points. Consequently, the proportion of individuals who believed their finances would remain unchanged regained a majority, increasing from 48.4 per cent in the previous month to 50.2 per cent.
- Future job prospects improved in July. The proportion of respondents who believed there would be more job opportunities increased by 1.4 percentage points to reach 12.6 per cent. Likewise, the proportion of those anticipating the same number of jobs rose by 1.8 percentage points, reaching 54.6 per cent. In contrast, the percentage of individuals expecting a decrease in job opportunities dropped to 20.3 per cent, reflecting a decline of 2.9 percentage points.
- Outlooks on major purchases deteriorated further in July. There was an increase of 0.2 percentage points to bring the proportion of respondents who considered it a good time for major purchases to 10.4 per cent. However, this was overshadowed by a more substantial 1.3 percentage point rise in the proportion of individuals who believed it was a bad time for major purchases to 68.1 per cent.
“Despite a promising moderation in inflation, the rising cost of living remains a concerning factor. The June Consumer Price Index (CPI) release, indicating an inflation rate of 2.8 per cent, showcased progress towards the Bank of Canada’s inflation goals and its efforts to control it. Nevertheless, consumers continue to be troubled by the cost of living, with a Q2 survey of consumer expectations by the Bank revealing that 48 per cent of respondents found it to be their primary concern. The increasing prices of essentials, particularly groceries, have contributed to this apprehension. Last quarter, every month had increases in grocery prices close to 10 per cent year-over-year. Additionally, the recent 25-point hike in interest rates adds further financial pressure on homeowners through increased mortgage costs. If the elevated cost of living persists, consumer confidence may experience a decline due to heightened financial burdens,” said the Board.
“Consumers in British Columbia have responded positively to affordability measures implemented by the government. Initiatives such as enhancing and expanding the climate action tax credit and increasing BC Family Benefits have resonated with the public. During July, more than two million individuals and families received their first quarterly payment from the province’s enhanced climate action tax credit. Moreover, starting from July 20, families with children will benefit from an additional annual allowance of up to $750. These improvements align with the positive trends observed in current and future financial and job outlooks among British Columbians. While reflecting a variety of factors, the improvements in the financial outlooks of British Columbians are, to a degree, likely also demonstrating the publics’ recognition of these enhancements. As awareness of these benefits spreads, outlooks are likely to experience further improvements.”
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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