Canadians are slowly shedding their pessimism about the economy as provinces gradually reopen from the pandemic-induced shutdowns, with the consumer confidence edging higher for a seventh straight week.
The Bloomberg Nanos Canadian Confidence Index, based on a random survey of Canadians, rose to 42.86 last week from 41 a week earlier. While the index still remains well below the historical average, it has continued to inch higher from record lows in April.
“Although consumer confidence remains net negative, there are emerging signs in the data of a potential confidence recovery,” Nik Nanos, chief data scientist at Nanos Research, said in the report. “Perceptions on the future strength of the Canadian economy has improved seven points compared to four weeks ago.”
The survey shows Canadians are increasingly buying into the idea that impact of the pandemic has peaked, with 20.2 per cent saying they believe the economy will strengthen over the next six months. Pessimists still outnumber optimists by almost four to one, with 62 per cent saying the economy will be weaker. But that’s better than a few weeks ago when 80 per cent of Canadians saw the economy weakening, with only seven per cent expecting it to strengthen.
The improvement in consumer sentiment coincides with other recent data that suggests the economy is starting to recover after activity collapsed in April at the height of the COVID-19 shutdowns. Credit card transactions, restaurant bookings and mobility data all show Canadians have begun to venture out and spend money.
New job postings on Indeed Canada, meanwhile, indicate businesses are starting to hire again. Statistics Canada data released earlier this month showed the economy added 290,000 jobs in May, helping to recoup a portion of the nearly 3 million jobs lost during the pandemic.
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. The index averaged 57 in the year prior to the crisis. Scores above or below 50 indicate net positive or net negative views on the economic mood of Canadians.
Here are other highlights:
- Canadians’ views on personal finances still remain weak and actually worsened last week, according to the survey. Only 14 per cent of Canadians say their financial situation has improved over the past year, which is the lowest level since the crisis began. This may reflect the coming expiration of the federal government’s emergency income support program which provides Canadians with $2,000 a month.
- Job security is returning to more normal levels. The share of respondents who said they are at least somewhat secure in their job hit 64.2 per cent, where it had been just before the crisis hit.
- Sentiment on housing is also improving. About 42 per cent anticipate a drop in home prices in the next six months. That’s still by historical averages, but down from 49 per cent four weeks ago.