Canadian economic confidence drops amid uncertainty over
economic recovery: RBC Canadian Consumer Outlook Index
Debt management top-of-mind with half of consumers focused
on reducing debt
TORONTO, October 1, 2010 — Canadian confidence
dropped significantly, reflecting concerns over the pace of
the global economic recovery, according to the September RBC
Canadian Consumer Outlook Index. After hovering around
the same mark since December 2009, the overall Index fell
14 points from 108 to 94, driven by declines in all three
sub-indexes that comprise the Consumer Outlook Index:
current conditions, expectations, and personal investments.
While six-in-ten Canadians (60 per cent) believe the overall
economic outlook is good, this is down seven points from last
quarter. Job anxiety, at 22 per cent, is up two points from
last quarter but still below its high of 27 per cent in November
2009. Looking ahead to the next year, fewer Canadians (46
per cent) now think that the national economy will improve
(down nine points from three months ago).
Debt management continues to weigh on the minds of consumers.
Half of Canadians (51 per cent) say they are focusing on reducing
their debt over the next year or so, while four-in-ten (39
per cent) say they plan on spending less.
"It's good to see people focused on debt management
and reduction," said Andrea Bolger, senior vice-president,
Personal Financing Products, RBC. "It's important that
Canadians feel confident and understand that managing debt
is crucial to their financial success."
While most Canadians (78 per cent) indicated they don't undertake
an official credit/debt review on a yearly basis, a majority
(60 per cent) say they keep close track of their debt. Forty
one per cent of Canadians are confident that they are managing
their debt well and 17 per cent say they're just keeping their
head above water.
"Regularly reviewing your borrowing needs and credit
situation while building your assets with the help of an RBC
advisor is key to staying on top of your finances and ensuring
your goals are being met," added Bolger.
Other national highlights include:
- Personal Financial Situation (Overall): The percentage
of Canadians who think that their personal financial situation
will improve in the next three months remains stable at
26 per cent in September, compared to 27 per cent in June.
Looking ahead, 39 per cent of Canadians expect their personal
economic situation to improve over the next year, lower
than the previous measure (42 per cent).
- Interest Rates: Sixty-six per cent of Canadians
think interest rates are going up in the next six months,
a significant decrease from the last quarter (84 per cent).
Three-in-ten Canadians (28 per cent) expect that interest
rates will stay the same over the same period.
"The uncertain and uneven global economic outlook has
not gone unnoticed by consumers, translating to heightened
anxiety and weaker confidence," said Craig Wright, senior
vice-president and chief economist, RBC. "The continued
uncertainty and uneven recovery was one of the factors contributing
to us downgrading our 2010 forecast, expecting GDP growth
of 3.3 per cent, down from 3.6 per cent projected last quarter."
RBC provides advice and tools to help clients manage their
debt including the following credit principles:
- Choose the credit solution that is right for you by aligning
your credit choices with your values and your financial
- Set goals and use debt wisely to achieve them
- Manage your debt effectively by determining how much you
can realistically afford and stay within your means
- Make sure you have a repayment plan - manage your debt;
don't let it manage you
- Understand the true cost of your debt - pay high interest
rate debt first.
Whether Canadians want to borrow with confidence, get more
from their everyday banking, protect what's important, save
and invest or take care of their businesses, the RBC Advice
can help answer their questions. Advice videos are updated
regularly to reflect current trends and to answer the questions
that are top of mind with Canadians. Interactive tools and
calculators provide customized information covering many facets
of personal finance. With the guidance of RBC advisors who
are available to chat live, Canadians have access to free,
no-obligation professional advice about RBC products and services
and personalized one-on-one service. In addition, all personal
RBC online banking clients have access, at no cost, to myFinance
RBC's new online financial management tool, and will enable
them to create a set budget and track their spending habits.
About The RBC Canadian Consumer Outlook
The RBC Canadian Consumer Outlook Index, benchmarked
as of November 2009, is conducted online via Ipsos Reid's
national I-Say Consumer Panel to 4,292 Canadians (642 British
Columbia, 473 Alberta, 500 Saskatchewan/Manitoba, 1,360 Ontario,
848 Quebec, 469 Atlantic 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. Data collection was September 1-9, 2010. 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 ±1.5 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:
RBC Corporate Communications, (416) 974-2727
RBC Media Relations, (416) 974-5506