Canadians want a long-term strategy if aid programs continue and deficit level increases: Nik Nanos
Canadian households are showing a newfound economic optimism, a good sign for the nation’s nascent recovery.
After stalling at the end of June, sentiment around personal finances, job security, economic growth and real estate are all beginning to march higher again, telephone polling shows.
The Bloomberg Nanos Canadian Confidence Index, which has risen three points over the past two weeks to 49.8, has returned to the torrid pace of gains recorded early in the rebound and has now recovered about two-thirds of its pandemic losses.
The pickup in household confidence is a welcome development, as economists and policy makers try to gauge the resiliency of the economic rebound. While the recovery from the deep downturn has been strong, there are worries the jump in activity and spending will peter out -- in part because of concerns the recession will have lasting negative impacts on consumers confidence.
While still below pre-pandemic levels, the Bloomberg index hit a milestone last week. Reaching 50 points means sentiment is no longer considered net negative, which it had been every week since the Covid-19 pandemic hit across the country. Just two weeks ago, the index stood at 46.7. It hit a record low 37.1 in April.
“After a crushing period of consumer confidence in Canada arising from the COVID-19 pandemic, for the first time since March 2020 sentiment is at a neutral as opposed to a negative posture,” said Nik Nanos, chief data scientist at Nanos Research.
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.
- Leading the improvements in the overall index are Canadians perception on real estate, with 30 per cent of respondents expecting higher housing prices. That’s double levels recorded for that question a month earlier.
- While concerns about economic growth remain elevated, the share of Canadians who say the economy will weaken is now down to 53 per cent. That figure was 59 per cent two weeks ago.
- Canadians are also showing less worry about their personal finances and losing their jobs.