OTTAWA – Consumer confidence continued to improve in June and now sits at roughly two-thirds of its pre-pandemic level, the Conference Board of Canada reported just prior to the Canada Day holiday.
The board reported the Index of Consumer Confidence (ICC) climbed 16 points over May’s result to 79.7 for June, compared to 120.6 when the pandemic was declared in early March. However, it’s down substantially from the 121.0 recorded on 01 July 2019. The index was set to 100 in 2014.
Conference Board of Canada economist Anna Feng said consumer confidence improved across all regions of the country in June with British Columbia logging the largest uptick this month while Ontario posted the smallest. “Sentiment about future employment improved this month across all regions as provinces begin to re-open,” she noted in her report, adding the share of Canadians expecting better job prospects in the next six months increased to 18.7%, its highest rate since March 2010.
In what amounts to good news for furniture, mattress and appliance retailers, the optimism in employment prospects prompted a significant upswing in positive to the major purchases question. The number of Canadians who believe now is a good time to make a major purchase rose to 20.4% in June, up from 5.8% in May – its lowest level ever.
“On the flip side,” Feng cautioned, “Canadians are still cautious about making major outlays. More people feel pessimistic about making a major purchase now (57.5%) than during the peak of the 2008 financial crisis (54.3%).”
June’s ICC showed Ontarians are more concerned about their financial situation this month compared with May. Fewer are enthusiastic about their current finances and optimism about future finances barely improved. “As a result, more than 63% of Ontarians believe now to be a bad time for major purchases, the highest rate among the provinces,” Feng said.
Quebec’s index climbed 22.5 points this month, the second-largest increase in the country. The province has the highest share of people who feel positive about both current and future finances. “Thus, it’s not surprising that the province also has the most optimism this month about spending on big-ticket items,” Feng observed.
The index for Saskatchewan–Manitoba rose 13.8 points in June, the second-smallest increase among regions. Canadians here are anxious about their future finances and the share feeling optimistic about them fell 1.7 percentage this month.
Meanwhile, Alberta posted the third-largest increase in confidence as sentiment around future labour and economic conditions strengthened. The board noted the recent production cut by OPEC and its allies significantly boosted prices, sparking some optimism about Alberta’s oil sector after the price war between Saudi Arabia and Russia gutted oil prices. “As a result, Albertans are more optimistic about future employment than they have been in over a year (17.2%) and their pessimism about making major purchases has declined to pre-COVID-19 levels,” Feng said.
British Columbia topped the chart in June with the largest increase in the Index of Consumer Confidence across Canada. “The province is approaching the third phase of its plan to reopen its economy, and people there are the most optimistic in the country about future labour conditions,” Feng said, adding residents are still deeply worried about their current finances.
The Atlantic provinces had the slowest recovery in the index, which is still almost 60 points shy of its pre-pandemic level. The index showed while sentiments about future employment strengthened, people are unsure of their future finances.
“Consumer confidence rose in all provinces this month,” Feng said. “Overall, the increase means that the Index of Consumer Confidence has recovered half of its COVID-19-induced losses. Consumers are more optimistic about future job projects but also more concerned about current finances. This has encouraged households to be cautious about major purchases in the near term.”