Oct 3, 2022
Housing slump, economic angst sink consumer confidence in Canada
Housing has never been so unaffordable in Canada: RBC Report
Canadian consumer confidence has dropped to near record lows again amid growing angst about the global economy.
The Bloomberg Nanos Canadian Confidence Index, a measure of sentiment based on weekly polling, declined for a fifth straight week to touch some of the weakest levels ever outside of the last two economic crises.
Canadians have rarely been so pessimistic about the economy since the index was launched in 2008. Half of Canadians expect the economy will weaken over the next few months, with only 14 per cent anticipating a stronger economy.
The slide has almost fully erased a mini-rebound in sentiment in August and suggests households are buckling under the weight of rising consumer prices, higher borrowing costs, a housing correction, plunging stock markets and growing talk of recession.
The souring mood casts doubt on whether Canadian consumer spending can continue to drive the nation’s economic expansion.
Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security, the economy and real-estate prices. Bloomberg publishes four-week rolling averages of the 1,000 telephone responses.
Here are some other poll highlights:
- The index fell to 46.5 last week, the weakest reading since July 2022, when it was hovering around the lowest level since the early months of the COVID-19 pandemic.
- Up until this year, the gauge had only fallen below 50 during the depths of the pandemic in early 2020, and during the financial crisis and recession in 2008 and 2009. It has averaged about 56 over the past decade.
- One driver of poor sentiment is a sharply deteriorating outlook for the nation’s housing market. The polling found 37 per cent of respondents expecting home prices to fall over the next six months, versus 26 per cent who see an increase. The 11-point differential is the widest on record outside the early weeks of the pandemic and the global financial crisis.