Canada shows 10 consecutive weeks of consumer confidence gains

Consumer confidence keeps improving in Canada, growing for the tenth week in a row, although at a slower pace already.

The Bloomberg Nanos Canadian Confidence Index was up slightly from 46 to 46.2 last week, marking a 10 points increase from a record low in April. While Canada gradually reopens from COVID-19 restrictions, the index remains at almost one-fifth below historical averages.

The 10-week period of gains is the longest since Nanos started tracking it in 2013. Nevertheless, there’s a potential concern in the report, as the sentiment may be plateauing at below pre-pandemic levels. The pace of growth has slowed down significantly during the previous two weeks, with last week’s 0.2-point increase marking the smallest one since May.

As you know, every week, Nanos Research surveys 250 Canadians concerning their views on personal finances, job security and forecasts on the economy and housing prices. Bloomberg releases four-week rolling averages.

The poll’s main findings:

• Canadians’ view on their personal finances is still pessimistic, with only 13% of respondents saying their financial situation has improved during the previous year. It’s almost the lowest level on record. Almost 36% say their finances have worsened, which is much higher than before the pandemic, but still less than 42% seen in April.
• Almost 55% of Canadians expect the economy to worsen during the next six months. It’s less than 80% reported in April, but still well above the historical averages. Moreover, the pace of growth started slowing.
• We can see almost the same scenario with the job security questions. Almost 15% of respondents are insecure or partially insecure about their employment, which is 10% lower than in April, but still above the pre-pandemic levels. The pace of improvement in this gauge is also slowing.
• Housing sector is the only one showing growing positive sentiment. The share of Canadians who expect home prices growth has doubled since May and reached 19%. In addition to it, now there are fewer respondents who worry about the prices decline. However, the sentiment remains well below the pre-pandemic levels.