Consumer confidence has dipped to its lowest level in nearly two and a half years, according to a report by the Conference Board of Canada.
The 3.3-point decline in October puts the think tank’s confidence index at 71.8, nearing the sentiment reached in 2009, when Canada was in the middle of its biggest recession in decades.
The index is measured against a reading of 100 in 2002, when consumers were extremely confident about the state of their finances.
The drop overshadows a slight rise last month. It was also the fifth decline in the last six months and the lowest level for the index since May 2009.
A survey released Wednesday by the Royal Bank of Canada also pointed to a sharp drop in consumer confidence.
Both surveys come as Canadians grapple with rising prices for gasoline, food and clothing, record debt loads as well as stock market turmoil and signs of slowing overall economic growth.
“The drop in the RBC Canadian Consumer Outlook Index reflects ongoing global economic uncertainty, showing that strong Canadian economic fundamentals insulate us but do not make us immune to the turmoil around the globe,” said Craig Wright, senior vice-president and chief economist at RBC.
Consumers surveyed in the Conference Board survey showed a surprising level of optimism about future job creation, but that was not enough to buoy their overall confidence, the board said in its report released Wednesday.
“The balance of opinion on whether now is a good time to make a major purchase fell to its lowest level since early 2009,” it added.
Consumer confidence in Ontario and B.C.–where rapidly rising home prices are eating up a bigger portion of household income–declined the most, by seven points or more. Meanwhile, consumers in the Prairie provinces indicated improved confidence, resulting in an index reading of 97 points, the board said.
