According to the latest consumer confidence survey conducted by TNS, the Canadian Consumer Confidence Index fell sharply in February, tumbling from 99.1 to 95.5, its lowest level since August.
"Canadians are feeling the effects of a number of adverse economic developments coming together at the same time. Employment is down, the housing market has 'cooled off' with fewer home sales, and Canadians continue to be wary of high debt," explained Norman Baillie-David, senior vice-president of TNS in Canada and director of the marketing and social research firm's monthly tracking study.
The Present Situation Index, which measures how people feel about the economy right now, plunged almost six full points, falling from 99.8 to 93.9, fuelling the pessimism that Canadians' are feeling about the situation right now.
The Expectations Index, which measures people's outlook for the economy six months from now, was the one sub-index which remained relatively stable, dropping only 0.3 points, which in fact should be interpreted as no drop at all in statistical terms.
The Buy Index, which measures the extent to which Canadians feel that now is a good time to purchase a "big ticket item" such as a car or a major household appliance, dropped 3.6 points in February, falling to its lowest point sinceOctober 2010, and showing its largest single month drop in two years.
"With employment down, the housing market down, and lingering concerns over debt-levels, Canadians this month have decided they'll put their wallets away, which unfortunately has the potential to make the situation worse," said Baillie-David.
ABOUT THE SURVEY: Consumer Confidence Index tracks Canadians' attitudes about the economy each month and is part of a global study conducted by TNS in 18 countries. Three indices are produced each month to show how confidence in the economy is changing: Present Situation Index; an Expectations Index; and a Buy Index. The Canadian fieldwork is conducted using the firm's national bi-weekly telephone omnibus service, TNS Express Telephone. A total of 1,015 nationally representative Canadian adults were interviewed between February 11 andFebruary 14, 2013. For a survey sample of this size, the margin of sampling error is plus or minus 3.1 percentage points, 19 times out of 20.