May 10, 2023
Canadians still pessimistic on economy, but outlook improving: Report
We're seeing a slow-motion credit contraction: Avenue Investments' Bill Harris
Canadians’ views on the economy and their personal finances are improving but still pessimistic overall, according to a monthly snapshot of consumer sentiment.
The Canadian Maru Household Outlook Index for May was at 85, up two points from April’s low of 83. Last month’s figure was the lowest since Maru’s monthly overview of Canadian consumers’ 60-day financial and economic outlook began tracking in April 2021.
“The question is whether the current upswing is a burst or just a bubble,” a report on the findings said, noting that sentiment until now had been increasingly negative since December.
The report noted that 12 of the 16 measures assessed for the index have moved upwards.
The index looks at topics related to the economy, personal finance, purchasing power and financial challenges. Slightly more positive views on the economy drove most of this month’s increase.
More surveyed Canadians said they believe the national economy will improve over the next 60 days, up to 41 per cent from 35 per cent a month earlier, though a majority still said they don’t believe the improvement will happen soon.
There was also a slight increase in sentiment that the local economy will improve, up six percentage points to 42 per cent, while 58 per cent of people remained pessimistic.
More Canadians also said they believe the economy is headed in the right direction, up five percentage points to 39 per cent. That was the highest level of positivity since May 2022, though a majority of people still felt the economy was headed the wrong way.
There was an increase in Canadians who said they plan to invest in the financial markets, up to 32 per cent from 27 per cent.
The biggest negative drag on the index was the larger cohort of people who said they are not able to put away money for retirement, up to 56 per cent from 53 a month earlier.
Other personal finance indicators fared better. Fewer Canadians reported worsening financial positions, with 10 per cent of people saying their position improved and 26 per cent said they were worse off.
Fewer people also reported being worried about losing their jobs, but more were concerned about the possibility of a loan or mortgage default.
These are some of the findings from a study released by Maru Public Opinion undertaken by its sample and data collection experts at Maru/Blue on April 28 to May 1, 2023, among a random selection of 1,508 Canadian adults who are Maru Voice Canada online panelists.
The results have been weighted by education, age, gender, and region (and, in Quebec, language) to match the population according to Census data which ensures the sample is representative of the entire adult population of Canada. Discrepancies in or between totals when compared to the data tables are due to rounding.