Consumer confidence sinks

After a slight recovery in March, Canadian consumer confidence suffered another significant setback amid reports of lacklustre job creation, a continuously slumping housing market, and continued worries over high debt.

According to the latest survey conducted by TNS, the Canadian Consumer Confidence Index dropped more than two full points, sliding from 96.5 in March to 94.4 in April.

Read: Q1 consumer spending up 3.31%

The Present Situation Index, which measures how people feel about the economy right now, which rebounded in March from a sharp drop in February, fell sharply again in April, dropping more than four points from 97.3 to 92.7.

“Canadians’ confidence in the economy is slipping quickly back to lows that we haven’t seen since during the Great Recession. The continued environment of public sector austerity, combined with high consumer debt, a deliberately slowing housing market and poor job prospects are all combining to create a perfect storm of pessimism among Canadians who increasingly are believing that the situation right now is not good,” explained Norman Baillie-David, senior vice president of TNS in Canada.

Read: Canada’s economic growth curbed

The Expectations Index, which measures people’s outlook for the economy six months from now, also dropped more than a point, slipping from 101.1 in March to 99.0 this month. This shows that even though Canadians feel very pessimistic about their situation right now, this pessimism isn’t translating yet into a bleak outlook for the future.

The Buy Index, which measures the extent to which Canadians feel that now is a good time to purchase a “big ticket item” such as a car or a major household appliance, actually bucked the trend in April, rising 1.2 points from 91.0 to 92.2.

“This probably reflects some pent up demand as well as the beginning of spring and some normal spending on seasonal renovations and upgrades,” added Baillie-David.

Full report is available here.

Read: Canadian consumer confidence recovers slightly in March

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.