... Except in the West
Canadians are becoming increasingly pessimistic about the economy and the availability of jobs — except those in the booming West — a new survey suggests.
The Conference Board’s latest consumer confidence survey for July shows that optimism is waning or remains at very low levels in most regions of the country, except in the prairies and British Columbia.
Nationally, the Ottawa-based think-tank’s confidence index slid one point to 85.9 in July, the third consecutive monthly dip.
By contrast, however, the confidence index rose 4.5 points to 107.8 in the prairies — the highest level in the country. And it remains elevated in British Columbia at 105.9, even though July saw a decline of 9.9 points.
The Conference Board says negative sentiments about the prospects for job creation over the next six months is the key reason for the glum sentiments among many Canadians.
“On a national basis, pessimism about the labour market continues to hamper a true recovery in confidence,” wrote Todd Crawford, an economist with the think-tank.
“Although the economy has more than recovered all the jobs it lost during the recession and the unemployment rate has trended down in the past few years, consumers appear not to have noticed, or they have no faith that the trend will continue.”
The sentiment is understandable given the recent record on job creation. Statistics Canada reported earlier this month that almost 10,000 jobs were lost in June and that over the past 12 months, a mere 72,000 net jobs were added, the poorest extended performance since the recovery began in July 2009.
Coincidentally, a consumer confidence survey in the United States, where job creation has been strong of late, found the index rising for the third consecutive month to 90.9, the highest reading since October 2007.
“Very encouraging news on U.S. consumer confidence ... Now if talk can be translated into action,” said senior economist Jennifer Lee of BMO Capital Markets.
The Bank of Canada and most economists believe a true recovery in the U.S. is a necessary pre-condition for lifting Canada out of the slow-growth lane of the last few years.
There were some encouraging signals in the Canadian report. More than 20 per cent of respondents said they were financially better off than six months ago, up two percentage points from June.
Canadians were less hopeful, however, about the prospects for improvement in their finances going forward. And fewer than in June said this was the right time to make a major purchase, such as a home or a car.
Crawford said this could reflect the fact households are carrying heavy debt loads, jobs opportunities are scarce and media reports that homes are overpriced.
But it was on the jobs front that the weakness was most acute.
Only 15.9 per cent of Canadians said they expected there would be more jobs available in six months’ time, a drop of 1.2 points. In Atlantic Canada, that number drops all the way to 5.9 per cent, the weakest response to the question since 1996.
Ontario residents were also concerned about jobs prospects, with only 12.6 per cent saying they expected better employment conditions, down from 15.3 per cent in June.
Sentiment in Quebec improved in July, the think-tank said, but from a low level.
Regionally, the July confidence index stood at 72.9 per cent in Atlantic Canada, 80.5 in Quebec, 74.9 in Ontario, 107.8 in the prairies and 105.9 in B.C.
The results are based on telephone and cellphone interviews with 2,000 Canadians conducted in the first two weeks of July. The survey is said to have a margin of error of plus or minus 2.1 percentage points.