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Canadians less optimistic about economy compared
to a year ago: RBC Canadian Consumer Outlook Index
Consumers trying to avoid debt as they pay off holiday bills
TORONTO, February 8, 2011— Canadians are
less optimistic about the outlook for the national economy
and their personal financial situation in 2011 than they were
last year, according to the January 2011 RBC Canadian Consumer
Outlook Index (RBC CCO). Less than half (43 per cent) of Canadians
feel the economy will improve over the next year, a marked
decline from the 56 per cent reported in last January's RBC
CCO. In addition, only 38 per cent of Canadians now feel their
personal financial situation will improve over the next 12
months, compared to 45 per cent a year ago.
The prevailing mood was reflected in the tight rein many
Canadians kept on their expenses over the past holiday season,
with 67 per cent responding that they managed not to overspend
their holiday budgets. Of this majority, 28 per cent reported
they had kept track of their spending by making a budget and
sticking to it; 26 per cent stated they knew how much they
had to spend and "once the money was gone, that was it".
By far, the largest number of respondents (46 per cent) said
that they stayed within their budget because they didn't want
to go into debt or increase their debt load.
"We know that managing debt is top of mind for Canadians.
Having a budget in place that you can stick to is one of the
best ways to keep your finances in balance and take care of
any debts," said Ashif Ratanshi, head, Branch Investments,
Deposits and Direct Investing, RBC. "This also gives
you a good base from which to do your financial planning for
the year. Ideally you want to ensure you are saving money
for your future as well as covering your expenses today. Good
financial advice can help you do both."
Despite the cautious economic outlook expressed by the majority
of Canadian respondents, there are indications that Canada's
economy will continue to grow in 2011 and 2012.
"While the pace of the recovery will remain moderate,
we are projecting growth of 3.2 per cent this year and 3.1
per cent in 2012, representing the fastest pace of growth
over the past four years," noted Craig Wright, senior
vice-president and chief economist, RBC. "As the economy
continues to expand, we expect interest rates to drift moderately
higher through the coming year. This should limit pressure
on household balance sheets in an environment of continued
employment gains."
Other highlights from the RBC CCO include:
- RBC Canadian Consumer Outlook Index: Overall, the
RBC CCO Index dropped from 106 points in January 2010 to
93 in January 2011.
- National Economic Outlook: While only 43 per cent
of Canadians feel the economy will improve over the next
year, Albertans are much more optimistic (61 per cent) and
Quebecers less optimistic (32 per cent) than the national
average. As for the current state of the economy, 60 per
cent of Canadians describe it as "good", with
the Prairies (77 per cent) and Alberta (75 per cent) feeling
the most positive.
- Personal Financial Situation Outlook: The number
of Canadians who generally feel that their personal financial
situation will improve over the next year dropped to 38
per cent from 45 per cent in January 2010. Albertans are
the most optimistic about their personal financial situation
(48 per cent), Quebecers and Ontarians are the least optimistic
(35 per cent and 36 per cent respectively).
- Job Anxiety Outlook: Nationally, job anxiety has
eased compared to a year ago. This year, 20 per cent of
Canadians surveyed stated that they are - or someone in
their household is - worried about losing their job or being
laid off, a drop from 26 per cent in January 2010. Job anxiety
was highest in Ontario (23 per cent) in January 2011 and
lowest in the Prairies (15 per cent).
- Holiday Season Expenditures: Of the one-third (33
per cent) of Canadians who overspent their holiday budgets,
the over-expenditure averaged $430. Atlantic Canadians were
the most likely to overspend (37 per cent), and overspent
by the largest amount ($521). Of the two-thirds (67 per
cent) of Canadians who stayed within their holiday budgets,
those living in Quebec and B.C. were most likely not to
overspend (72 per cent and 70 per cent respectively).
About RBC's financial advice and interactive
tools
RBC's myFinance
Tracker is a new online financial management tool that
offers all personal RBC online banking clients the ability,
at no cost, to create a set budget and track their spending
habits. In addition, whether Canadians want to get more from
their everyday banking, protect what's important, save and
invest, borrow with confidence or take care of their businesses,
the RBC Advice Centre
(www.rbcadvicecentre.com)
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.
About the RBC Canadian Consumer Outlook
Index
The RBC Canadian Consumer Outlook Index, benchmarked
as of November 2009, is conducted online via Ipsos Reid's
national I-Say Consumer Panel to 3,533 Canadians (503 British
Columbia, 476 Alberta, 589 Saskatchewan/Manitoba, 721 Ontario,
678 Quebec, 566 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 January 4 to 10, 2011. 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 ±1.65 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:
Kathy Bevan, RBC Corporate Communications, (416) 974-2727
Gillian McArdle, RBC Media Relations, (416) 974-5506
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