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Canadian Budgets Feeling the Bite: RBC Canadian Consumer Outlook Reports Impact of Rising Food and Gas Prices

Debt and spending levels targeted for 2011

TORONTO, April 12, 2011— Steeper gas and food prices are significantly impacting Canadians and their budgets, according to 45 per cent of the Canadians surveyed by the quarterly RBC Canadian Consumer Outlook Index (RBC CCO). These rising costs were registering highest among those living in Ontario (51 per cent), Atlantic Canada (49 per cent) and Quebec (48 per cent).

As an overall financial focus for the year, managing debt remains top of mind for consumers across the country, with 39 per cent planning to pay off their debt as much as possible, 30 per cent focused on spending less, 23 per cent looking to save or invest more and 25 per cent saying they intend to do all of these.

"Being able to save depends on effectively handling your expenses, so it's good to see Canadians are focused on managing their debt, expenses and savings," said Dave McKay, group head, Canadian Banking. "We're focused on helping every client find the right balance between taking on debt and growing their savings, based on their needs today and in the future."

The quarterly RBC CCO takes the pulse of Canadians on a number of topics, including consumer outlook for three key indices: national economy, personal financial situation and job anxiety. Over the next year and compared to the last quarter, 42 per cent of respondents feel the Canadian economy will improve (down one per cent); 39 per cent feel their own personal financial situation will improve (up one per cent); and 22 per cent are worried about job loss or being laid off (up two per cent).

Countering concerns about employment, the most recent Economic Outlook issued by RBC Economics in March 2011 forecast that labour market conditions will remain firm throughout the year. This report also noted that disposable income is expected to post a 4.1 per cent gain across the country.

"The gain in disposable income, alongside an improving labour market, will provide continued support to consumer spending and will lead to an eventual levelling out in consumer debt relative to income," said Craig Wright, senior vice-president and chief economist, RBC. "Debt levels are expected to increase more slowly, given a moderation in the housing sector, rising interest rates and efforts by consumers to rein in debt burdens."

The RBC CCO is Canada's most comprehensive consumer assessment of the economy, personal financial situation and economic and purchasing expectations. Other highlights from the RBC CCO include:

  • RBC Canadian Consumer Outlook Index: Overall, the RBC CCO Index has risen to 96 points from 93 in January 2011.

  • National Economic Outlook: While 42 per cent of Canadians feel the economy will improve over the next year, this sentiment is even stronger in several regions, including Alberta (50 per cent), B.C. (46 per cent), Saskatchewan/Manitoba (45 per cent) and Ontario (44 per cent). As for the current state of the economy, 61 per cent of Canadians describe it as "good", compared to 75 per cent of Prairie residents in Saskatchewan/Manitoba, 69 per cent of Albertans, and 63 per cent of residents of B.C.

  • Personal Financial Situation Outlook: The number of Canadians who generally feel that their personal financial situation will improve over the next year increased by one percentage point to 39 per cent since January 2010. This view is held most strongly in Alberta (45 per cent), Quebec (43 per cent) and Saskatchewan/Manitoba (40 per cent).

  • Job Anxiety Outlook: Nationally, job anxiety has increased by two percentage points to 22 per cent. At 28 per cent, residents of Ontario are expressing the most concern about the outlook for job loss or layoffs in the upcoming year, followed by people living in Quebec and Atlantic Canada (21 per cent each). Prairie residents in Saskatchewan/Manitoba are the least anxious about jobs (16 per cent).

Related regional releases and comparative data charts can be accessed via www.rbc.com/newsroom.

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 banking service.

About the RBC Canadian Consumer Outlook Index
The RBC Canadian Consumer Outlook Index (RBC CCO) is Canada's most comprehensive consumer assessment of the economy, personal financial situation and economic and purchasing expectations. Benchmarked as of November 2009, the RBC CCO is conducted online via Ipsos Reid's national I-Say Consumer Panel to 3,520 Canadians (534 British Columbia, 502 Alberta, 482 Saskatchewan/Manitoba, 901 Ontario, 582 Quebec, 519 Atlantic Canada). Weighting is 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 March 11 to 15, 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
Seema Sharma, RBC Corporate Communications,
(416) 974-5606

 

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