OTTAWA – After making gains in each of the prior two months, the Conference Board of Canada’s Index of Consumer Confidence fell 2.3 points in April. This reflects increasing concern about housing affordability while expectations about future finances and employment prospects worsened. The balance of opinion on the major purchases question held steady.
The national index was 109.4 last month. It was set to 100 in 2014.
Last month’s survey was conducted online over a ten-day period beginning April 3 and included some 3,000 adult Canadians.
As has been the case in recent months, there have been noticeable regional differences in the index.
For example, British Columbia’s index fell 12% last month, which board economist Marc Desormeaux attributed primarily to deterioration in the balance of opinion on the major purchase question. “This could be due to renewed fears about housing affordability; survey respondents from the Greater Vancouver Area, which has seen the largest run-up in prices, were significantly less optimistic about purchasing a big-ticket item than consumers elsewhere in the province,” he noted in his report.
Consumer expectations about their employment prospects and their future finances also worsened in April, he said.
While its index showed a small increase last month, housing affordability continuing to weigh on the minds of consumers in Ontario. Desmormeaux noted there was much media attention paid to the provincial government’s effort to cool the region’s red hot real estate market. “Consequently, fewer GTA consumers felt that it was a good time to purchase a big-ticket item like a home or a car,” he said, adding, “since late 2016, the balance of opinion on the major purchase question has trended downward in the Toronto area while holding steady elsewhere in Ontario.”
Offsetting this was Ontario’s labour market, which has recorded full-time jobs gains in seven of the last eight months. “In April, this was met with more optimism regarding both current and future financial conditions,” he said.
Meanwhile, the index in Quebec reached its highest level since November 2007.
“The province’s economy is on a roll,” Desmormeaux said “Last year; Quebec experienced its best year of economic growth since 2010, and has now seen jobs gains in eight of the last nine months. The provincial government also tabled a third consecutive balanced budget and unveiled a series of new income tax cuts in late March.”
Quebec consumers also indicated their household finances were improving and that now was a good time to make a major purchase. “Expectations did not improve regarding future financial and employment conditions which was likely the result of the loss in full-time positions last month. Still, the balance of opinion on both questions has been trending generally upward over the last year,” Desmoreaux observed.
Confidence also fell in Alberta and Saskatchewan-Manitoba in April. In Alberta’s case, it fell after two months of increases in the index. “And although the province’s index remains depressed relative to historical levels, the Alberta index has seen steady gains over the last six months as the price of oil has stabilised,” Desmoreaux said.
The Saskatchewan–Manitoba index sits at a 14-month low after falling for the second consecutive month in April. The board noted the balance of opinion deteriorated on all four survey questions in Saskatchewan, outweighing the positive effects of an improving labour market in Manitoba.
“This trend is expected to continue,” Desmoreaux said. “Manitoba’s economy is expected to perform well this year, but employment growth and crude oil production levels in Saskatchewan are not anticipated to pick up until oil prices return to more normal levels. As such, consumer confidence in the region is unlikely to improve significantly in 2017.”
The index for Atlantic Canada also fell – mainly because of pessimism about job prospects.
“This is an unsurprising result; the region has seen little in the way of job creation of late, and Nova Scotia is the only Atlantic province expected to see decent employment growth this year,” Desmoreaux said. “It appears that the job losses and shift toward more precarious, shorter-term work has been met with uncertainty about future financial conditions. Over the past year, increasing numbers of East Coast consumers have indicated that they expect their household finances to deteriorate in the next six months.”
However, on the bright side, the Atlantic Canada consumer has seen decent wage gains to date in 2017, fueling a generally upward trend in their opinions about current finances.
The Conference Board of Canada maintains a web site at conferenceboard.ca