Job gains prompt index push
OTTAWA – Despite continued regional differences and mounting concerns about housing affordability, the Conference Board of Canada has reported its Index of Consumer Confidence rose 1.1 points in March to 111.7, its highest level since January 2010. This modest uptick came on the heels of a nine-point surge in January and was attributed largely to recent job gains at the national level.
In his report, board economist Marc Desormeaux noted survey respondents felt their household finances had worsened in March even though the balance of opinion on the other questions – including major purchases – showed some improvement when looked at nationally. But there are significant differences in each of five regions across the country that the index covers.
For example, following a significant increase in February, the Ontario index fell in March. While job creation has been strong recently, wage growth hasn’t kept up. This prompted a greater number of Ontarians to indicate their household finances had deteriorated over the last six months. Respondents in Canada’s largest province also voiced concerns about housing affordability, particularly those living in the Greater Toronto Area (GTA) – an issue that has been flagged by both the Bank of Canada and OECD (the Organisation for Economic Co-operation and Development).
“Accordingly, the balance of opinion regarding whether it is a good time to make a major purchase, such as a home or a car, has declined steadily in the GTA since late 2016,” Desormeaux said. “It has held steady elsewhere in Ontario over the same period.”
While consumer confidence was up in Quebec last month, the overall score obscures the details to some degree. The board noted a greater number of households said their household finances had deteriorated over the past six months and even though the balance of opinion on the major purchases questions was up slightly in March, “consumers in Quebec have become increasingly apprehensive about purchasing big-tickets items since the second half of 2016.”
Consumer sentiment remains depressed in Canada’s energy-producing regions. “Despite significant gains in March, Alberta’s index remains well below its pre-oil price rout levels,” Desormeaux said although he pointed out a greater share of Albertans felt that their household finances had improved in the last six months.
The Saskatchewan–Manitoba index has also struggled recently and has only risen about 100 once since 2014. The board noted Saskatchewan’s employment levels aren’t anticipated to grow until oil prices return to more normal levels, every though the province saw solid job gains last month. Consumers in this part of the country are pessimistic about the state of their future finances.
Confidence has risen in each of the last months for British Columbia, which still has the highest level in the country. “B.C. has seen two successive months of strong full-time job creation, and the shift toward stable, longer-term work had consumers on the West Coast feeling more optimistic about buying big-ticket items like homes and cars in March,” Desormeaux said, adding while housing affordability remains an issue, the balance of opinion on the major purchases question has been trending upward since last October.
Consumer confidence also increased in the Atlantic region. “However, there remains a great deal of uncertainty about future financial conditions, and the balance of opinion on the question has been trending generally downward in the last six months,” Desormeaux said. “As well, households increasingly felt in March that now was a bad time to make a major purchase.”
This means the Atlantic provinces face modest growth prospects over the coming months.
The Index of Consumer Confidence is the result of an online survey of some 3,000 Canadian adults conducted between March 6 and 16, 2017.