Blip produces confidence uptick
TORONTO (24 November 2011) - A statistical blip caused the TNS Consumer Confidence Index to move slightly upward from 95.2 to 96.0 in November, the market research firm has reported.
"This is likely just a statistical blip; certainly not enough to say that the downward trend in confidence has ended," TNS Canada vice president Norman Baillie-David said in a statement.
"The good news is that at least this shows that the continuing uncertainty in Europe and the U.S. is not doing any more major damage to confidence," he continued, adding, "In other words, this isn't perhaps the bad news about confidence that we may have been expecting, but it isn't a good news story, at least not yet."
Baillie-David is also the director of the TNS monthly tracking study, which interviewed some 1,015 nationally representative Canadian adults by telephone between November 14 and 18. The margin of sampling error is plus or minus 3.1 percentage points, 19 times out of 20.
The November survey noted the Present Situation Index - the measure of how people feel about the economy right now - rose 1.8 points to 96.3. "This indicates that despite continuing gloomy economic news and uncertain prospects, Canadians are looking around and saying to themselves: ‘things maybe going crazy everywhere else, but my own situation right now is still not that bad'," Baillie-David said.
The Expectations Index - which measures people's outlook for the economy six months from now - also rose by 1.5 points to 99.5 from 98.0 in October.
"Continuing uncertainty is making Canadians...well...uncertain," Baillie-David said. "There doesn't seem to be any consistent pattern, showing that Canadians really don't know what to make of their prospects six months down the road."
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 - bucked the trend of the other indices and fell from 93.4 to 92.1 this month.
Baillie-David believes this shows "Canadians can't make up their collective minds as to whether or not now is a good time to purchase. However, with the holiday season around the corner, this does not provide much optimism that consumers will spend in a big way."
During the months of November and December, the TNS survey asks Canadian consumers about their spending intentions for the holiday season.
The results suggest Canadians are planning to spend less this year than last year, continuing a downward trend which began in 2008. On average, Canadians say they are willing to spend $776 dollars this year, compared to $812 last year (2010), and $866 in 2009.
While most Canadians say they are likely to spend about the same as last year (59%), it is the proportion of Canadians who normally intend to spend the most ($2,000 or more) which has dropped most significantly, causing the average overall intended spend to fall.
Baillie-David noted that last year 12% of Canadians fell into this group, and this has dropped to 9% - which is actually a 25% decrease in this number.