Canadians show almost record weak consumer confidence

Canadian consumer confidence fell to almost record low level once again restrained by stronger worries over the global economy.

The Bloomberg Nanos Canadian Confidence Index, showing the sentiment based on weekly surveys, was down for the fifth consecutive week to one of the lowest numbers on record with the exceptions of the previous two economic crises.

Last week, the index fell to 46.5, which is the weakest result since July 2022, when it was already at the lowest mark since the beginning of the COVID-19 pandemic.

Canadians haven’t been that pessimistic about the economy since the index was introduced in 2008. Half of the respondents believe the national economy will weaken during the next few months, and only 14% predict improvements.

The decline has almost fully offset a small rebound in sentiment seen in August. It suggests that Canadian households are facing too much pressure from growing consumer prices, higher borrowing costs, a housing correction, slowing stock markets and higher odds of recession.

This mood leads to a question of whether Canadian consumer spending can keep supporting the nation’s economic growth.

One of the main reasons of poor sentiment was a significantly deteriorating forecast for Canada’s real estate market. According to the survey, 37% of respondents believe home prices will go down over the next six months, while only 26% predict a hike. Such a gap between the two numbers is the largest on record with the exception of the early weeks of the pandemic and the global financial crisis.

Every week, Nanos Research surveys 250 Canadians asking them about their opinion on personal finances, job security, the economy and housing prices. Bloomberg releases four-week average results based on the 1,000 telephone responses.