Canadian consumer confidence in the final quarter of 2014 reverses the upward trend seen last quarter and moves towards the familiar levels seen earlier this year.
The Nielsen Consumer Insights – Investors Group Index of Consumer Confidence dropped to 82.1 in the final quarter of 2014, almost a 4 point decrease over the 85.8 recorded in the previous quarter this year. This confidence level is 2.4 points lower than the 84.4 recorded in the final quarter of 2013.
According to Nielsen Consumer Insights Business Manager Danielle Armengaud; "The consumer confidence did show a slight decline in this quarter but the levels are still consistent with those seen earlier this year. It is important to note that the decline seen this quarter is majorly driven by the strong negative reactions from Alberta and Quebec. In this quarter alone, the proportion of Albertans who think Canadian economy will be better next year has dropped by 14 points. The proportion of Quebecois indicating that this is a good time to make big purchases has also dropped by 12 points. On the whole, there is a 6 point increase in both the proportion of Canadians who expect the economy to perform worse in the coming year and those who think it is not a good time to make major purchases. Despite the decline in short-term confidence, the outlook of Canadians towards the performance of the Canadian economy over the next 5 years is unchanged."
"Regional differences are not unusual in Canada and that is why it is advisable to adopt a more complete and longer term perspective," said Gaetan Ruest, Vice-President, Corporate Research, at Investors Group. "For instance, approximately half of all Canadians think the economy will get stronger of the coming 5 years. The longer term view is a proper foundation for personal financial planning and Canadian consumer confidence is an important part of that picture."
More Canadians are pessimistic about the coming year than optimistic: 15% of Canadians said they see good times for the economy in the next 12 months (down 3 points from the last quarter), while another 20% said they see bad times (up 6 points from the last quarter).
The optimism about the long-term outlook for the economy seems unchanged with nearly half (48%) of Canadians saying they see good times ahead in the next five years. Conversely, 36% believe the next five years will bring unemployment and recession. A comparison with the final quarter last year indicates that the positive sentiment has dropped by 2 points during the last year.
Nearly three in ten (28%) Canadians have a positive outlook about their own and their family's financial well-being in the coming 12 months. This is exactly same as the final quarter last year.
Although the negative sentiment around this being a good time to make major purchases increased by 6 points this quarter, it is comparable to the levels seen in earlier quarters. These levels are also consistent with what was observed in the final quarter of 2013.
The same number of Canadians say their personal financial situation is better now than a year ago, or worse than a year ago: 18% say they are better off financially, while only 19% say they are worse off now. A comparison with previous quarter indicates a 3 percentage point drop in the proportion of Canadians who are better off while the proportion that thinks they are worse off is virtually unchanged.
www.nielsen.com