RBC Canadian Consumer Outlook Index Rises as Canadians Show Cautious Optimism
Three-in-four Canadians paying for the holidays with money on hand, not debt
TORONTO, January 4, 2010 — The RBC Canadian Consumer Outlook Index rose eight percentage points in December, as consumers were less likely to delay major purchases and their job anxiety fell significantly. As the new year begins, most Canadians are exercising financial prudence, with three-in-four (75 per cent) paying for their holiday spending with money on hand instead of incurring debt and most
(58 per cent) not planning to shop for post-holiday deals in January.
Currently, Canadians are divided regarding the overall state of the economy: 51 per cent view it as good and 49 per cent view it as bad. Looking ahead, three-in-five Canadians (60 per cent) expect the Canadian economy to improve over the next year, while only 17 per cent expect it to worsen. This optimism was also reflected in a significant drop in the percentage of Canadians who plan to delay major purchases, such as cars, vacations and appliances, due to current economic conditions (47 per cent in December versus 63 per cent in November).
“Canadians are becoming more optimistic but as this index shows, their focus remains on managing day-to-day expenses with many finding it hard to save for their retirement or their children’s education,” said David McKay, group head, Canadian Banking, RBC. “In 2010, we’re continuing to reach out to our 10 million customers with advice that will help them save money, save time and grow their investments.”
National highlights include:
- Job Anxiety: One-in-five Canadians (21 per cent) say that a member of their household is worried about losing their job or being laid off, down significantly from one-in-four (27 per cent) last month. With the exception of British Columbia, where job anxiety is unchanged, job anxiety is down across the country, with the lowest levels in Manitoba and Saskatchewan (seven per cent) and Atlantic Canada (10 per cent).
- Personal Financial Situation (Overall): The percentage of Canadians who think that their personal financial situation is worse than it was three months ago remains fairly constant (38 per cent in December compared to 39 per cent in November). However, there has been a slight improvement in the percentage of Canadians who think that their personal financial situation will improve in the next three months, which has risen slightly (30 per cent in December compared to 27 per cent in November). Canadians are more optimistic in the longer term, with more than four-in-ten Canadians (43 per cent) expecting their personal economic situation to improve over the next year (compared to 38 per cent in November)
- Interest Rates: A majority of Canadians (57 per cent) think interest rates are going up in the next six months, a significant increase from the November poll (52 per cent). Four-in-ten Canadians (38 per cent) expect that interest rates will stay the same over the same period.
“As noted in our recent economic forecast, the Canadian economy is set to grow, with real GDP rising by 2.6 per cent in 2010 and 3.9 per cent in 2011,” said Craig Wright, senior vice-president and chief economist, RBC. “While challenges remain, continued improvement in the labour market in 2010 will contribute to an eventual decline in the unemployment rate and provide ongoing support for consumer spending.”
About The RBC Canadian Consumer Outlook Index
The RBC Canadian Consumer Outlook Index, benchmarked as of November 2009, is based on the results of an online survey of 1,018 Canadians, ages 18 and over, conducted by Ipsos Reid between December 8 and 11, 2009. This data represents the most timely and comprehensive snapshot of consumer attitudes regarding their finances and the economy in Canada. Weighting was then employed to balance demographics and ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of this size and a 100 per cent response rate would have an estimated margin of error of ±3.1 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults in Canada been polled.
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For more information, please contact:
Rina Cortese, RBC Corporate Communications, (416) 974-6970
Gillian McArdle, RBC Media Relations, (647) 400-8464