Consumer Confidence Falls to Its Second Lowest Point to Date

The Index of Consumer Confidence falls another 1.6 points in September.

The Index of Consumer Confidence dropped to 59.6 in September, down from 61.2 in August. With September marking two consecutive monthly declines, the index has reached its second lowest point on record, dating back to 2002.
Canadian consumers’ current financial outlooks shifted towards negativity. Notably, there was higher percentage of individuals – 37.2 per cent (up from 34.6 per cent in August) – who said that their current finances have worsened in September. Meanwhile, there was also a decrease in the proportion of respondents who perceive their financial situation as the same.
In terms of future financial outlooks nationally, consumers also shifted more negative. For example, the proportion of individuals who expect their future finances to worsen increased, rising from 25.6 percent to 27.4 percent and outpacing the minor growth seen in positive sentiment.
Canadians’ views on future job opportunities remained essentially unchanged. There was a slight decrease in the proportion of individuals who anticipate an increase in job opportunities in the future, declining from 10.9 percent to 10.5 percent. However, there was also a minor decrease in the proportion of individuals who expect a reduction in future job opportunities, decreasing from 25.1 percent to 24.5 percent.
Finally, for major purchases, consumers shifted toward a more pessimistic view. Notably, the proportion of individuals who deemed now as a good time for a significant purchase has declined, moving from 8.7 percent to 8.2 percent. Additionally, there was a modest increase in the percentage of respondents who saw now as a bad time for a major purchase, rising from 68.2 percent to 70.4 percent.

Key Insights

Investment in Quebec is helping boost the province’s consumer confidence. In August, Ford Motor Co. and its South Korean partners, in collaboration with both provincial and federal governments, announced a significant commitment to Quebec by announcing the construction of a $1.2 billion EV battery material manufacturing facility. As news of the project has spread, we have seen Quebec’s confidence improve largely through its future financial, and future job outlooks. While the investment looks to bring jobs to the region post-completion, its effect on confidence extends beyond this. Set to become operational in 2026, the project serves to create many construction jobs and bolster demand for construction-related materials. Moreover, the project may help reinforce Quebec’s confidence over its construction period by providing a buffer against economic downturns should one occur.

Wildfires continue to impact British Columbian confidence. 2023 has been British Columbia’s worst wildfire season, compounded by August’s wildfire emergency extending into September. The effects of the wildfires on confidence are apparent as each wildfire emergency has coincided with a sizable decrease in confidence for the region. The most recent wildfires of the region have resulted in a double digit drop in its index of consumer confidence, bringing it to its lowest point ever recorded. All categories within the region’s index have declined as the wildfires have disrupted lives, caused property damage, hindered work opportunities, exacerbated air pollution, and disrupted operations across various industries. As some fires continue, the full extent of their impact on September’s confidence is uncertain, and with the wildfire season expected to extend into the fall, the province’s confidence may face further deterioration in the ensuing months.