Canadian consumer confidence hits highest level since ’22

Pessimism about the Canadian economy is beginning to diminish, with the Bloomberg Nanos Canadian Consumer Confidence Index rising to 54 last week, its highest level since May 2022, Bloomberg reported on Monday.

This represents a gain of about three points over the last month, indicating net positive sentiment. A reading above 50 signifies optimism.

The index, which surveys around 250 Canadians weekly on personal finances, job security, and economic and real estate outlooks, reflects a two-year high in confidence.

The Bank of Canada recently cut its policy rate by 25 basis points to 4.75 per cent, marking the first rate reduction in four years. While most survey responses were collected prior to this widely anticipated rate cut, the overall economic mood has improved.

Despite the uplift, views on the current economic situation remain more pessimistic compared to historical averages dating back to 2008.

Canadian households continue to face challenges, with the country experiencing a per-capita recession since 2022 and consumer prices over 10 per cent higher than pre-pandemic levels.

Future expectations are more positive, buoyed by bullish real estate sentiment. While 40.5 per cent of respondents anticipate economic weakening over the next six months, this is an improvement from the highs of 63.8 per cent in 2022 and 52.9 per cent in 2023.

Sentiment is more optimistic in Quebec and Atlantic Canada, compared to weaker confidence in British Columbia, Ontario, and the Prairies. The survey has a margin of error of about 3 percentage points, 19 times out of 20.