Consumers appear to be more confident about their current finances but are still worried about employment in their communities and their own future finances.
The Conference Board of Canada‘s overall index of consumer confidence was up in October, breaking a string of month-to-month declines, although there continued to be significant pessimism among respondents to a monthly survey.
The overall monthly index was at 79.7 points in October, up 1.5 points from September.
The Ottawa-based economic forecaster said the improvement from September’s survey was due entirely to improved confidence about current finances, while most respondents remained pessimistic about future employment conditions.
The monthly survey, conducted between Oct. 7 and Oct. 17, found 17.5% of respondents felt their financial situation had improved over the past six months, up 4.3 percentage points from September.
In addition, the number of negative responses on current finances was down 1.5 percentage points to 21.7%.
“Positive responses on this question are now at their highest level since the beginning of the year,” the Conference Board said Thursday. That outweighed increased negativity about future finances and whether it’s a good time to make a major purchase.
“Consumers were asked if they expected their financial situation to improve over the coming six months. This month, just 22.9% responded positively. That is a decrease of 1.6 percentage points from last month–and 10.6 percentage points below where it was at the start of the year.”
On the questions about major purchases, only 41% of respondents said it’s a good time to put money into high-priced items, while 47.9% said it was a bad time.
“The balance of opinion on this question has completely reversed since the beginning of the year, when positive responses outweighed negative ones by a significant margin. This trend could indicate weaker consumer spending going forward.”
The view on future employment was essentially unchanged from the September report.
“Despite the fact that employment levels have returned to their pre-recession levels, consumers are showing little faith in the recovery in Canada’s labour markets,” the report said.
