Ottawa – The Conference Board of Canada’s Index of Consumer Confidence fell by 2.6 points to 87.3 in May, the first decline of 2014. The drop in confidence was driven by continued worries regarding future job prospects, as well as a more pessimistic view of current finances.
Consumer confidence increased in the Prairie region and BC, but declined in Central and Eastern Canada. Despite the decline this month, the overall trend is positive, with the index up 6.6 points compared with the same time last year. This month’s survey was conducted between May 8 and May 18, 2014, and the margin of error is plus or minus 2.1%.
There was a notable drop in optimism about future job creation. After a strong gain last month, the balance of opinion in Quebec fell 16.3 percentage points in May. Less severe drops were recorded in Ontario and the Atlantic region. The trend out West toward more positive expectations for the labour market continues, with both the Prairies and BC showing further improvements this month. The Prairies and BC are the only two regions where respondents expecting more jobs six months from now outnumber those expecting fewer jobs.
Nationally, the proportion of respondents who expect fewer jobs rose 3.7 percentage points to 21.4%. At the same time, there was a 0.9 percentage point drop — to 17.1% — in the share of respondents who expect more jobs in their community in six months’ time.
On the other hand, record-low interest rates continue to fuel consumer demand for major purchases, with the share of consumers who said that now is a good time to make a major purchase increasing for the fifth consecutive month. At 45.9%, almost half of respondents now say this a good time to make a major purchase. That’s up 0.9 percentage points from last month.
There was also a 1.9 percentage point decline — to 38.2% — in the share of respondents who said that now is not a good time to make a major purchase. The greatest optimism on the major-purchases question came from respondents in the Prairie region — which is not surprising, given their confidence about income and employment prospects in the region.