Ottawa, ON — Consumer and business optimism waned in April, as both individuals and firms felt their financial prospects would weaken in the short term, according to the Conference Board of Canada’s Index of Consumer Confidence and Index of Business Confidence.
"Consumer optimism related to financial and job prospects diminished — albeit modestly — last month," said Pedro Antunes, director of economic forecasting for the Board.
Consumer confidence declined by 3.4 points overall, to 121.1, and edged downward in every region. Compared to one year ago, confidence in western Canada has increased, but it has declined in Ontario, Quebec and the Atlantic provinces.
The results — based on a survey of 2,000 Canadians between April 7 and 12 — are consistent with the Conference Board’s latest Provincial Outlook, which forecasts western provinces to enjoy the fastest economic growth in 2005.
After declining by 11 points in the survey conducted last winter, business confidence dropped a further 3.9 points in April to 135.9. The percentage of firms expecting their financial positions to improve dropped to 43%, down five percentage points.
Businesses, however, were slightly more upbeat about the overall near-term strength of the economy, buoyed by strong retail sales, and remained positive about business investment intentions.
"Canadian companies are in the midst of adjusting to life with a stronger dollar," said Antunes. "A majority of companies — 63% — said they planned to increase investment spending in the next six months, as imported machinery and equipment is now cheaper.