According to the Conference Board of Canada, consumer confidence in Canada has fallen to its lowest point since April 2020 amid continuing high inflation.
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In its latest Index of Consumer Confidence, which was released Monday, the board said inflation news may have reinforced fears that further interest rate hikes are required; the recent increase in inflation may have raised consumers’ doubts about the Bank of Canada’s ability to efficiently steer inflation back to the targeted range; and August’s announcement of increased unemployment was mirrored in consumers’ confidence.
“During August, the Consumer Confidence Index dropped to 61.2, down from 73.6. This is its largest single
month-to-month drop this year,” said the report.
“Consumers’ outlooks on their current finances revealed a decline in optimism in August. The proportion of individuals perceiving their current finances as better decreased by 3.2 percentage points to 10.0 per cent of respondents. Simultaneously, there was a marginal increase of 1.4 percentage points in those perceiving their finances as the same – rising from 51.4 per cent to 52.8 per cent. Lastly, the proportion of respondents viewing their current finances as worse increased slightly, climbing from 32.9 per cent to 34.6 per cent.
“Respondents’ outlooks on future finances indicated a decline in optimism, with the percentage of individuals expecting improved future finances decreasing from 16.0 per cent to 14.7 per cent. Concurrently, there was a slight uptick in those anticipating consistent future finances, rising from 50.2 per cent to 51.3 per cent. Additionally, the proportion of respondents foreseeing future financial challenges increased from 23.6 per cent to 25.6 per cent.”
The report said perceptions regarding future job prospects underwent notable shifts in August. The percentage of individuals expecting an increase in job opportunities decreased from 12.6 per cent to 10.9 per cent. Meanwhile, those foreseeing the same number of job opportunities declined from 54.6 per cent to 50.4 per cent. Conversely, there was a notable increase in the proportion of respondents anticipating a decrease in future job availability. This proportion rose 4.8 percentage points from 20.3 per cent to 25.1 per cent.
“Sentiments around big ticket purchases exhibited a negative trend in August. The percentage of individuals viewing now as opportune for a major purchase decreased from 10.4 per cent to 8.7 per cent. Additionally, there was a modest increase in the proportion of respondents uncertain whether now is a good or bad time for major purchases. The percentage grew from 21.5 per cent to 23.1 per cent.”
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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