MRO Magazine

Consumers think it’s a good time to spend money

Ottawa, ON -- According to the latest Index of Consumer Confidence from the Conference Board of Canda, the consumer...


Industry

December 20, 2007
By MRO Magazine

Ottawa, ON — According to the latest Index of Consumer Confidence from the Conference Board of Canda, the consumer confidence index bounced back in November 2007 after declining on job concerns in October, posting a gain of 2 points and bringing the index to 100.2 (2002 = 100).

The balance of opinion improved on all four questions asked in the Index survey, with the most positive movement occurring in consumer’s expectations for future income. This could be due to the federal government’s plan to cut the goods and services tax (GST) by one percentage point in January 2008 and to implement retroactive personal income tax cuts.

With the exception of a marginal decline in the Atlantic Provinces, consumer confidence was up across the country. The survey of consumer confidence was conducted between Nov. 1 and Nov. 7.

When asked if their family was better or worse off financially compared with six months ago, 13% of respondents felt they were worse off. That is a drop of 0.9 percentage points from October. Additionally, there was a 0.9 percentage point increase — to 24.7% — in the proportion of respondents who felt their family was in a better financial position. Overall, there was an improvement in the balance of opinion on the current income question.

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Consumers were also feeling more optimistic about their future financial condition, with a solid increase in the balance of opinion on the future finances question. When asked if they felt their family would be better or worse off financially in six months, 31.9% of respondents felt they would be better off. That’s up 2.7 percentage points from the previous month. Adding to the good news on this front was the 0.6 percentage point decline — to 8% — in the number of respondents who felt that their family’s finances would be in worse shape six months from now.

After falling significantly in October, the balance of opinion on the future job market question increased marginally in November. While there was an increase of 2.3 percentage points — to 22.7% — in the number of respondents who felt that there would be more jobs in six months, this was offset by a 1.3 percentage point increase — to 19.1% — in the proportion of respondents who felt that there would be fewer jobs in their community.

Heading into the important holiday shopping season, consumers appear ready to spend. There was a healthy increase in the balance of opinion on the major purchases question. When asked if right now was a good time for the average person to make a major purchase, 53.3% of respondents indicated that it was a good time, up 1.4 percentage points from the previous month. Furthermore, there was a 1.6 percentage point decline — to 34.3% — in the number of respondents who felt that now was not a good time for the average person to make a major outlay for a large purchase.

Relative to last year, consumer sentiment toward making major purchases is up. When consumers were heading into the holiday shopping season at this time last year, only 50.1% of respondents felt it was a good time for the average person to make a major purchase, while 38.1% felt it was not a good time.

With the exception of the Atlantic Provinces, where the index fell by a marginal 0.3 points, consumer confidence was up across the country. The index in British Columbia increased by 2.2 points, while in the Prairies it gained 1 point. Gains also occurred in Ontario and Quebec where the indexes increased by 2.9 and 1.9 points respectively.