According to the Bloomberg Nanos Canadian Confidence Index released today (3-28-22), Canadian consumer sentiment tumbled to a reading of 56.3 last week, which is its lowest level in more than a year. Russia’s invasion of Ukraine and surging inflation cloud the economic outlook, weekly polling data suggest. The gauge is down more than 3-points since the end of February.
For the first time since 2020, the share of Canadians who believe the economy will weaken over the next six months surpassed 50%. The numbers suggest the combination of higher inflation, rising interest rates, and uncertainty surrounding the war is starting to weigh on consumers, with potentially dangerous impacts on spending and growth.
The report details that up until last month, Canadian household consumer confidence numbers held up relatively well compared with other countries, buoyed by a booming housing market and expanding economy. But the surge in oil prices since Russia’s invasion of Ukraine and the beginning of rate hikes from the Bank of Canada are raising worries.
The survey data show pessimists on the economic outlook outnumber optimists by more than two-to-one, with 51% of respondents expecting the economy to weaken. That’s up 10 percentage points since February. At the same time, about 39% of respondents said their finances have worsened over the past year, which is also the highest since 2020, when sentiment figures hit record lows as the Covid pandemic hit.
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