Consumer confidence edges higher: RBC

It could be the promise of spring, just around the corner, but Canadian’s were more optimistic in February, according to RBC. Consumer confidence edged higher, to a reading of 109, compared to 106 in January.

A slight majority (53%) of Canadians describe the economy as good compared to 47% who said it was bad. That’s a near mirror image of January’s poll, when 52% said it was bad, and 48% said overall state of the economy was good.

One quarter of Canadians remain worried about losing their job, a continuation from January. Anxiety over jobs increased in Ontario (up five percentage points to 30%) and the Atlantic provinces (up six points to 24%), while the rest of the country saw anxiety levels decline.

Anxiety was lowest in the central prairies, with only 13% worried about their jobs in Manitoba and Saskatchewan.

“Canadians may be feeling more positive about the economy because job growth numbers were released in early February. We expect to see a sustained improvement in the labour market over the course of the year,” said Robert Hogue, senior economist, RBC.

“According to Statistics Canada, employment increased by 43,000 in January, which pushed the unemployment rate down to 8.3%,” he continued. “While this figure has been steadily improving, there are still 280,000 fewer Canadians employed than there were in October 2008. This could be responsible for Canadians’ relatively high level of job anxiety.”

Looking ahead, Canadians are fairly optimistic, as 62% said they expected the national economy to improve over the next year, up from 56% in January. Just 13% expect conditions to deteriorate.

Meanwhile 45% expect their personal economic situation to improve over the next year.

In the near term, 41% expect the economy to improve in the next three months. But there was less optimism toward their own personal financial situation, as only 30% expect improvement there in the coming three months.

“The best way to deal with uncertainty and potential challenges is to create a financial plan,” said David McKay, group head, Canadian Banking, RBC. “It helps gain control over day to day finances and builds a path to financial security in the long run.”

When asked where they see interest rates headed in the coming six months, 65% expect an increase, while 33% said rates will remain unchanged.

(03/01/10)