Canada

As negativity declines, consumer confidence in Canada reaches a two-year high.

The negative outlook for the Canadian economy is beginning to soften.
The economic sentiment gauge, the Bloomberg Nanos Canadian Consumer Confidence index, reached a record high of 54 last week, marking the highest level since May 2022. Over the past month, the index increased by around three points. Net positive emotion is indicated by a rating above 50.

Approximately 250 Canadians are surveyed by Nanos each week to get their opinions on the economy, real estate values, and their personal financial and job security situations. Four-week rolling averages of the 1,000 phone responses drawn at random are released by Bloomberg.

Based on the net difference between positive and negative replies, Canadians felt better last week about all of these areas. The overall confidence index reached its highest point in two years as a result of that.

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For the first time in four years, the Bank of Canada lowered interest rates on Wednesday, bringing its policy rate down by 25 basis points to 4.75%. Although the majority of poll replies came before the rate reduction, the central bank’s action was largely expected following many months of a slowdown.

Even with the recent improvement, opinions on the current situation are still far worse than they have been on average since the data’s inception in 2008. Canadian families have been suffering because the nation has experienced a recession since 2022 and because consumer prices have increased by more than 10% from their pre-pandemic levels.

Nonetheless, prospects for the future are more optimistic than usual, partly because of the general optimism surrounding real estate. When asked about their predictions for the economy, the majority of respondents (40.5%) said they thought it will weaken during the following six months. While still negative, this is an improvement over the previous year: the cohort’s size peaked in 2022 and 2023 at 63.8% and 52.9%, respectively.

In Quebec and Atlantic Canada, sentiment is more favorable than the national average, while it is weaker in British Columbia, Ontario, and the Prairies. The margin of error for the poll is 19 times out of 20 and is approximately 3 percentage points.

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