Consumer confidence strengthens in March, board reports
OTTAWA – The Conference Board of Canada’s Index of Consumer Confidence (ICC) picked up 14.1 points in March, it’s largest monthly increase since last June when in rose following the end of the first round of pandemic-related closures. In fact, the board said the index now sits at 87% of its pre-pandemic level.
The index was set at 105.2 in March. It was set to 100 in 2014 and was 120.6 when the COVID-19 pandemic was declared at the end of February 2020.
In a statement, the board said the latest survey revealed that with lockdown measures being lifted and vaccines being rolled out, Canadians were much more optimistic about the future in March. More than 25% of survey respondents believe there will be more jobs six months from now, a historic high share of optimism on that question.
Consumers also felt more satisfied with their finances in March, likely stemming from the recent improvement in the labour market as well as the extension of the Canada Recovery Benefit from 26 weeks to 38 weeks. Only 21.7% of respondents expressed pessimism about their current finances.
“As we head into spring, consumer confidence in Canada is on the rebound,” conference board economist Anna Feng said. “People feel more confident about their current finances and future job prospects than at any time in more than six months. The positive sentiment should, hopefully, carry forward as we head into the second half of this year.”
She also noted as sentiments improved on finances and job prospects, Canadians were more confident about making a major purchase in March. Close to 24% of respondents believe now is a good time to make a major purchase, the highest level within the past year. This improvement in consumer confidence should help support a recovery of consumer spending.
While the national index climbed, so did each of the regional ones that make up the monthly study conducted by the Conference Board of Canada’s economic forecasting group.
Atlantic Canada: The index in this region rebounded 21.5 points in March, following two consecutive months of decline. The share of optimistic views on the major purchases question logged the largest increase in March, on the back of improving sentiments about future job prospects and current finances. However, the Atlantic region continues to fall behind the recovery pace of other regions, with the index sitting at only 74.5% of its pre-pandemic level in March. Consumers in the region worried the most about future financial conditions. Only 11.7% of survey respondents believe their finances will be better off six months from now, the lowest share of optimism across regions.
Quebec: Quebec’s index pushed higher (up 9.7 points) for the third consecutive month. With most regions in the province starting to move from the red zone to a less strict orange zone, the future seems promising for Quebecers. Consumers in the province are particularly optimistic about their future job prospects, leading to the province having the highest share of positive responses (32%) among regions. Nevertheless, consumers still worry about their finances, both current and future, as sentiments on these two questions deteriorated. As a result, Quebec is the only province that recorded rising pessimism on the major purchases question. More than 50% of respondents believe now is a bad time to make a major purchase, the highest share of negative views among provinces.
Ontario: Ontario’s index rose 12.4 points in March, reaching 92% of its pre-pandemic level. As the province gradually moves out of lockdown, Ontarians feel more optimistic about their future job prospects and finances. However, consumer sentiments on current financial condition stalled, with the positive share of responses remaining at 13.6%. This weighed on Ontarian’s confidence in making major purchases. With less than 20% of respondents believing now is a good time to make a major purchase, Ontario has the question’s lowest share of optimistic views.
Manitoba and Saskatchewan: Consumer confidence in the Manitoba-Saskatchewan region rose 12.1 points in March, reaching around 85% of its pre-pandemic level. Consumers in the region are more confident about their finances but also more anxious about future job prospects. This is the only region where the optimism level on the question of future employment stalled. On a positive note, the advancement of sentiments on both current and future finances supported consumers’ confidence in making major purchases.
Alberta: The Alberta index jumped 6.7 points in March, offsetting its 6.3-point loss last month. With oil prices ramping up in early March, Albertans are significantly more confident about their future job prospects. The share of optimism on future employment reached a 39-month high of 23.8%. However, consumer sentiments on current finances worsened. Around one-third of survey respondents think their current financial situation is worse than six months ago, the highest share of pessimism across regions. Concerns over finances weighed on sentiments about major purchases as Alberta logged the smallest improvement in positive views on that question.
British Columbia: The index in British Columbia soared 32.1 points in March, the largest monthly gain among Canadian provinces. British Columbians are less cautious about making a major purchase this month, as the province has the lowest share of pessimistic views (38.6) on the question. The confidence in purchases is supported by improved sentiments on future employment and current finances. Around 28% of respondents believe there will be more jobs six months from now, the second-highest share of optimism across regions.