The remarkable resilience shown by Canadian consumers in the face of increasingly worrisome economic trends is finally starting to crack, according to TNS Canadian Facts’ monthly survey.
The Present Situation Index, which tracks how well Canadians think the economy and employment are doing, stood at 109.3 during the survey period of May 2 to 8. That was down significantly from 113.7 the previous month, and a substantial decline from the record of 122.8 set in November. (All figures compare the current level of confidence against an index set at 100 for July 2004, when TNS launched the survey.)
“Increased costs at the pump and at the supermarket may be the most important drivers of pessimism for Canadians in the short term as they factor in increasing risks to their disposable income,” says Richard Jenkins, who directs the monthly tracking study as vice-president of the Toronto-based market-research firm.
The figures don’t at all suggest a panic, or even deep pessimism. In fact, 42% of the 1,015 adults who responded to the survey said the Canadian economy is at least fairly good.
Still, the trend is clearly downward, and the drop between April and May was striking. For instance, the Expectations Index — which measures how well consumers expect the economy, household income and employment to be faring six months from now — dropped to 92.9 from 97.8 in April. Last November it stood at 103.6.
The Buy Index, which gauges the degree to which people think now is a good time to make major purchases, fell to 88.3 in April, a sizeable one-month fall from 94.0 in April. Last November it stood at 95.9. The May results show that just three in 10 respondents think now is a good time to make a major purchase.
