ECONfidence: Consumer confidence steady; Worries about markets increase

This quarter saw a slight drop in the overall Index, with Canadians reporting a 1.9% decrease in confidence since March, 2012. However, this negative move does not indicate a blanket drop in confidence among Canadian consumers.

Little has changed in perceptions about current economic conditions. Canadians are, on the whole, only slightly more pessimistic about their present situation, with views of the current economic condition falling back to levels similar to those seen in December, 2011.

In terms of individual index components, three of the six measures registered positive, including current job prospects, 6-month job prospects, and 6-month personal income forecast.

Simultaneously, the current state of the economy, 6-month economic forecast, and 12-month stock market value indicators were responsible for the overall decrease in the index, registering drops of 2.0%, 1.4%, and 6.5%, respectively.

Despite the drop in the overall index, Canadians seem to feel more secure about their personal financial situations. There is a marked optimism about job prospects, and favourable economic conditions at home have people optimistic about future income growth.

However, doubts about markets and the world economy appear to be putting downward pressure on overall confidence levels. Interestingly, when markets were gaining ground in March, 2012, Canadians had a positive outlook for 12-month stock market values – now, in June 2012, markets have taken losses and Canadians have turned their 12-month outlook around.

Although such sentiments could be genuine, educated economic observations, this could be an example of a sociological phenomenon under which individuals are more likely to believe that future trends will mimic the present, regardless of probabilities.

In terms of individual liquidity, the rainy day money analysis shows that Canadians’ cash position has not changed measurably since March of 2012. These figures suggest a relatively stable liquidity base, with nearly two thirds of Canadians able to pay an unplanned $1,000 expense from their savings or checking account.

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Methodology

For each interval, Abacus Data conducts an online survey among at least 1,000 randomly selected Canadian adults, drawn  from an online panel of over 150,000 Canadians.

The June 2012 survey was conducted from June 21st – 23rd and interviewed 1,008 Canadians.

Since the online survey was not a random, probability based sample, a margin of error could not be calculated.

The margin of error for a survey of 1,004 respondents using a probability sample is  +/- 3.1%, 19 times out of 20.

Results of the survey were statistically weighted by gender, age, region, language, and immigration status using census data from Statistics Canada. Totals may not add up to 100 due to rounding.

These questions were posed as part of the Abacus monthly Omnibus.

 

For more information about the poll’s methodology, visit the Abacus website at www.abacusdata.ca

To compute the index, Abacus Data uses a weighted average distribution of the means of the following questions:

How would you rate the current state of the Canadian economy? (scale: very good to very poor)

How easy or difficult is it to find a job in Canada right now? (scale: very easy to very difficult)

In the next six months, will the Canadian economy… (scale: get better to get worse)

In terms of jobs, in the next six months, will there be… (scale: much more to much fewer)

In the next six months, will your personal income… (scale: increase a lot to decrease a lot)

In the next 12 months, will stock prices be… (higher, the same, or lower)