- After dropping 0.6 points in January, the Index of Consumer Confidence fell a further 7.6 points in February to 93.1 (2014 = 100), the lowest level in eleven months.
- Canadians’ reservations over current finances edged lower this month, with 11.1 per cent (12.3 per cent in December) of those surveyed positive about their current financial situation.
- Concerns about future finances were evident this month, with only 16.3 per cent of those surveyed sharing a positive outlook on future finances six months from now. Although remaining relatively constant, this is still below the pre-pandemic average of 22.4 per cent.
- Hesitancy over making major purchases remained broadly the same as the previous month, with only 16.2 per cent of survey respondents believing now is a good time to buy large-ticket items.
- Despite the jobs lost in January, 22.8 per cent (same as last month) of surveyed Canadians are optimistic that job opportunities will return six months from now.
Key insights:
- The index dipped below 100 for the first time in nine months. Still, it is important to note that certain regions such as Quebec, Saskatchewan and Manitoba experienced a slight uptick, hinting that not all is dark and gloomy. In fact, most Canadians are optimistic that jobs will return six months from now, despite the lingering government restrictions and vaccine mandates.
- Two opposing forces will be at play in the coming months. On the one hand, higher fuel prices and rising inflation could further erode consumers’ confidence as they spend less and save more. Falling real wages could also see households’ confidence dwindle as they adjust their consumption habits to tackle inflation. On the other hand, Omicron appears to have peaked nationally, and provinces are reopening. This could result in increased optimism as consumers start to feel a degree of normalcy and slowly begin to change their consumption patterns (by spending more on services) to reflect the easing of restrictions and mandates.
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