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Consumers less confident during 2021’s holiday season

 7 January 2022     HGO Staff 

OTTAWA – Heading into the recently ended Holiday Season, the Conference Board of Canada reported its Index of Consumer Confidence retreated seven points for the month of December to 101.2, the largest drop in the past three months. The decrease was seen nationwide and is now at its lowest point since April 2021.

The index was set at 100 in 2014 and sat at 121 in February 2020, immediately prior to the declaration of the COVID-19 pandemic.

In a statement, board research associate Momanyi Mokaya noted Canadian consumer concerns about the state of their current finances remained relatively unchanged in December, with only 12.3% of those surveyed saying they were positive about their current financial situation.

Consumer reservations about future finances were very evident during December, with a two-percentage point decrease in the share of respondents feeling optimistic about their future finances.

Reluctance over making major purchases – such as a home, car or furniture and furnishings – remained broadly equal to November’s survey with only 18.3% of those Canadian consumers survey believing now is a good time to buy a large-ticket item.

The board noted with job growth picking up sharply in November, 24% of surveyed Canadians are confident about their future job prospects. Though this figure is lower than last month, it still exceeds any pre-pandemic high.

“The last thing Canadians wanted during the holiday season was Omicron disrupting their plans,’ Mokaya said in his analysis of the index data. “The new variant is creating an uncertain environment and dampening consumers’ optimism. High frequency data show that Canadians have already reduced their visits to restaurants. Depending on the severity of infections and hospitalizations, we could see a further decline in consumer confidence in the coming months until booster shoots become more widely available.”

The analysis was published before the provincial governments in Ontario and Quebec introduced their so-called ‘circuit breaker’ restrictions to prevent further spread of the Omicron variant.

Mokaya also believes Canadians were likely to spend less in the run-up to the Christmas holiday and save more as their purchasing has been weakened by inflation which is at a 30-year high.

“Omicron’s rise could further disrupt supply chains, adding to Canadians’ inflation woes,” he continued, adding, “Besides, recent floods in British Columbia have already exacerbated supply chain pains. Major supply chain arteries have been shut for weeks and the provincial state of emergency has been extended…. These developments don’t bode well for consumer confidence this winter.”


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