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Consumer Confidence Falls for the Third Month in a Row

Canadian Economics

By: Walter Bolduc

The Index of Consumer Confidence fell another 1.4 points in October.

  • The Index of Consumer Confidence dropped to 58.2 in October. This marks three consecutive monthly declines.
  • Canadian consumers’ outlooks on their current finances shifted slightly more negative. Views that finances were better saw almost no change (up from 10.0 per cent to 10.2 per cent). In contrast, the proportion of individuals who believed their current finances remained the same experienced a slight decrease (down from 50.4 per cent to 49.5 per cent), while those who viewed their current finances as worse increased one percentage point (up from 37.2 per cent to 38.2 per cent).
  • In terms of future financial outlooks, Canadians were also more pessimistic. The proportion of individuals anticipating better future finances decreased slightly from 15.5 per cent to 13.8 per cent. Similarly, there was a modest increase in those anticipating worse future finances, rising from 27.4 per cent to 28.6 per cent.
  • Canadians’ views on future job opportunities were essentially unchanged. The proportion of individuals who believed there would be more jobs in the future saw a minor uptick, rising from 10.5 per cent to 10.8 per cent. Meanwhile, the percentage of individuals anticipating fewer jobs in the future stayed effectively the same, only dropping 0.1 percentage points to 24.4 per cent.
  • Finally, for major purchases, consumers shifted slightly towards a more optimistic view. The proportion that saw now as a good time for a purchase increased 0.6 percentage points to 8.8 per cent, while the proportion that saw now as a bad time only increased 0.2 percentage points. Despite this, the proportion that think now is a bad time remains the majority at 70.6 per cent.

Key Insights

New funding in British Columbia is promoting the province’s consumer confidence gains. This month, the province saw a significant uptick in confidence which has almost completely reversed last month’s drop. Pairing with the province’s gain in confidence have been funding announcements by the federal government. In October, the federal government announced funding of over $3 million for British Columbia aimed at helping small and medium-sized businesses and helping workers improve their technical skills. This funding is expected to support over 1,000 small and medium-sized business as well as create over 80 jobs and train over 600 professionals. Also, this month, the federal government announced $89.5 million in funding to help build 238 rental homes across various parts of the province. The funding will combine with the federal government’s recently implemented GST rebate on rental construction and plans to increase the annual issuance of Canada Mortgage Bonds to create construction jobs and increase housing supply in the province.

Investment in Ontario could help the province regain some lost confidence. Starting from June 2023, Ontario has seen 5 consecutive months of consumer confidence decline. In October, ground broke on the construction of Umicore Rechargeable Battery Materials Inc.’s $2.76 billion plant located in Loyalist Township, Ontario, joining major automotive investments in Windsor and St. Thomas. While the project will happen over multiple stages, the plant is expected to begin production in 2026, creating 600 new jobs and 700 co-op positions. Besides its employment outcome once production starts, the project could help boost confidence in the region by creating construction jobs and bolstering demand for construction-related materials, many of which could be sourced from within the province.

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