Consumer confidence in Canada goes down to a 14-month record low level

The recent data shows that Canadian consumer confidence fell to its lowest level in more than a year amid Russia’s invasion of Ukraine and growing inflation issues.

Last week, the Bloomberg Nanos Canadian Confidence Index went down to 56.3, marking the lowest result since January 2020. The measure is also down by more than 3 points from the end of February.

It’s the first time since the last year that the share of Canadians who expect the economy to weaken during the next six months exceeded 50%.

Such results suggest that the mix of higher inflation, growing interest rates and uncertainty around the war begins to affect consumers, with potentially dangerous influence on spending and economic growth.

Every week, Nanos Research surveys 250 Canadians asking them about their views on personal finances, job security, the economy and housing prices outlook. The confidence index is an average number based on four-week data of about 1,000 responses.

Before the last month, Canadian consumer confidence showed quite good results compared with other countries, supported by an active real estate market and growing economy. However, the oil prices increase since Russia’s invasion of Ukraine and the start of a rate hikes cycle from the central bank are causing worries.

The poll results show pessimists on the economic forecasts outnumber optimists by more than two-to-one: 51% of respondents believe the economy will weaken, which is 10% more than in February.

Almost 39% of respondents noted their personal finances have worsened during the previous year, which is also the highest level since 2020, when the figures hit record lows due to the COVID-19 pandemic.

Views concerning the housing sector were still elevated, as 63% of Canadians still expect home prices to keep going up. Job security also exceeded the historic average numbers.