According to the latest Bloomberg Nanos Canadian Confidence Index (BNCCI), a measure of sentiment based on weekly polling, Canadian consumer confidence recorded its sharpest weekly decline since the darkest moments of the pandemic, with inflation and deteriorating outlook for housing weighing on consumer confidence.
Last week the BNCCI declined to a reading of 54.3, the lowest reading since December of 2020. The 1.8-point decline is largest one week drop in the market since April of 2020.
The numbers suggest the combination of rising prices, higher rates, and the war in Ukraine is starting to weigh on consumers. The country’s housing market is also showing signs of a reversal. About 55% of Canadians expect home prices to continue increasing, down from 59% last week and as high as 64% last month. Even with the decline, however, housing price expectations still remain above historical averages.
The index hit an all-time high in July of 2021 but has been inching lower as the initial optimism around vaccines and the reopening from COVID-19 has faded. Sentiment currently sits below historical averages.
People are particularly concerned about their pocketbooks. About 39% surveyed said their personal finances have worsened over the past year, near the highest since the early days of the pandemic.
The survey data show pessimists on the economic outlook outnumber optimists by almost a three-to-one ratio: 50% of respondents expecting the economy to weaken and only 18% predict it will be stronger.
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Consumer Confidence Tumbles in Canada as Housing Market Reverses