Majority of Canadians Not Prepared for a Rainy Day: RBC Canadian Consumer Outlook Index
Emergency savings funds low; Canadians focus on debt management
TORONTO, October 26, 2011 Over half (57 per cent) of Canadians don't have any savings set aside for a rainy day, and three-in-ten (30 per cent) report they dipped into their savings to help pay for every day expenses or an emergency, according to the October RBC Canadian Consumer Outlook Index (RBC CCO).
Canadians are, however, very focused on finding ways to manage their finances. Over the next 12 months, 33 per cent plan to reduce their debt, 30 per cent intend to spend less, 21 per cent expect to save or invest more and 21 per cent plan to take all of these actions.
"Helping Canadians find ways to manage their debts while building their savings is where financial planning advice can really make a difference," said Ashif Ratanshi, head of Branch Investments, Deposits and Direct Investing at RBC Royal Bank. "Achieving the right balance is key - being able to set aside even a small amount of money each month can help Canadians achieve their future goals."
The RBC CCO also found that fewer Canadians appear to be optimistic about their outlook for the country's economy. One-quarter (26 per cent) anticipate that the national economy will improve over the next year, down 16 points from the previous quarterly RBC CCO.
Canadians are not alone in tempering their outlook. The most recent RBC Economic Outlook projects 2.4 per cent growth for the Canadian economy in 2011, a reduction of 0.8 percentage points from the forecast issued in June.
The overall RBC CCO Index, meanwhile, is at 70 points, down 24 points from last quarter, as measured against its baseline of 100 established in November 2009.
"The drop in the RBC Canadian Consumer Outlook Index reflects ongoing global economic uncertainty, showing that strong Canadian economic fundamentals insulate us but do not make us immune to the turmoil around the globe," noted Craig Wright, senior vice-president and chief economist, RBC. "Given the uncertainty, the drop in the index was not unexpected, though it was disappointing."
The RBC CCO is Canada's most comprehensive consumer assessment of the economy, personal financial situation and economic and purchasing expectations. Other national highlights from the October RBC CCO include:
- Personal Finance: Almost one-third (32 per cent) of Canadians think that their personal financial situation will improve over the next year, down seven percentage points from the previous quarter.
- Job Anxiety: Concern about jobs remains unchanged from the previous quarter, with 22 per cent of Canadians worried about someone in their household losing their job or being laid off.
- Major Purchases: More than half (54 per cent) of Canadian families are delaying major purchases such as a car, household appliances or vacation spending due to economic conditions. Almost half (47 per cent) expect that their family will spend less on such purchases in the upcoming year.
The national RBC CCO release, full set of regional releases and related comparative data charts can be accessed via www.rbc.com/newsroom/2011/1026-cdn-consumer.html.
About RBC's debt management and other financial advice and interactive tools
RBC's myFinanceTracker, a new online financial management tool, offers all personal RBC online banking clients the ability, at no cost, to create a set budget and track their spending habits. Whether Canadians want to get more from their day to day banking, protect what's important, save and invest, borrow with confidence or take care of their businesses, the RBC Advice Centre can help answer their questions. Interactive tools and calculators provide customized information covering many facets of personal finance. In addition, online advice videos are updated regularly to reflect current trends and to answer the questions that are top of mind with Canadians. 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. Further information is available at www.rbcadvicecentre.com.
About the RBC Canadian Consumer Outlook Index
Benchmarked as of November 2009, the RBC CCO is conducted online via Ipsos Reid's national I-Say Consumer Panel. Data was collected between September 26 to October 3, 2011, via 3,054 Canadians (453 British Columbia, 454 Alberta, 458 Saskatchewan/ Manitoba, 705 Ontario, 516 Quebec, 467 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. 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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