Last week’s Canadian Confidence Index jumped from 57.5 to 59.5, the highest it’s been since October 2014. Sentiment improved in every region of the country and in all of the major areas, including real estate and personal finances.
Even though Canadian household debt is at a record high – according to Statistics Canada, Canadians owe $1.65 for every after-tax dollar they earn, a large part of that being mortgage debt – the number of Canadians who are worried about job security and deteriorating finances is at its lowest since early 2015.
“Household wealth took a boost from rising house prices and the year-to-date uptrend in the equity market,” Bloomberg economist Robert Lawrie said in the report. “And new manufacturing orders turned positive after a year and half of negative growth while the unemployment rate continued to edge down. All of these developments should support household expectations.”
Predictions of housing market bubbles and the oil slump affecting the economy are getting a lot of headlines, but even so, there was a notable decline in Canadians who are anticipating falling real estate prices and a weakening economy. Optimism increased in every region in Canada, led by Ontario, where the confidence reading of 62.6 was the highest since September 2014. The Prairie region climbed to 53.9 from 51.9. And housing recorded the widest spread between optimists and pessimists since October 2014, while optimists of Canada’s economic outlook outnumbered pessimists by the most since November.
“In addition to more positive week over week views on personal finances, economic strength, job security and real estate, the economic mood had positive movement in every region of the country over the past week,” Nanos Research Group chairman Nik Nanos said in the report. He told Bloomberg that there are a combination of factors contributing to this confidence, but that part of the change may be due to the U.S. presidential race, and Canadians feeling stronger and more secure about their situation in comparison to those living south of the border.
The gap between those who say their personal finances are better off, at 16.3 percent, versus those who feel worse off, or 21.5%, is 5.2 percentage points, the narrowest since June 2015.
The Bloomberg Nanos Canadian Confidence Index is a composite of a weekly measure of financial health and economic expectations. It’s based on telephone polling with a four-week average of 1,000 respondents. It is considered statistically accurate within 3.1 percentage points, 19 times out of 20, with larger margins of error for regional breakdowns.
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