Canadian consumers feel the pressure

Nielsen's Consumer Confidence Report shows how an economic dip has impacted spending habits.

Concerns about a volatile economy and uncertain job security mean Canadian consumer confidence is at a three-year low, according to the most recent edition of Nielsen’s Consumer Confidence report.

The study surveys 30,000 people in 60 countries worldwide on a number of questions and creates the Consumer Confidence Index, measuring overall confidence in the countries relative to each other.

Canada’s index dropped to 96, down from 103 in the last Consumer Confidence report in Q3 of 2014. This not only puts it 11 points lower than the U.S., which dropped only a single point from last year, but below the global average of 97. This is the first time Canada has been below the global average on the index since Q1 2012 and only the second in the last 10 years of the report.

Feelings about employment are continuing on a downward trend. Only 38% of Canadians surveyed felt positive about their job prospects, down from 48% in Q4 last year and 56% in Q3. Positive perception of personal finances was at 47%, down from 56% in Q4 and 61% in Q3. Only 37% said they had immediate spending intentions, the lowest level since 2012, and 24% said they have no spare money after covering essential expenses, up from 18% who said the same last year. This led North America to having the most people with no spare money of any region.

Carman Allison, VP of consumer insights at Nielsen Canada, mentions in the report that a downturn in confidence is common following the holiday season; however, for our U.S. neighbours, positivity about job prospects was at 45% and positive perception of overall personal finances was at 51%.

“In Canada, consumer confidence still remains volatile and uncertain even though the recession is well behind us,” he said. “Exacerbating the situation further was the drop in oil prices, which led to significant job losses in the country. While consumers may be saving at the pump, the cost of most other essentials is on the rise, and inflationary pressures still plague wallets.”

In the six months ahead, the top concerns among Canadians will be their debt, the economy, job security and their health. To address those concerns, 57% of Canadians surveyed said they have changed their spending habits, with 59% saying they will cut down on takeout (up from 54% in Q3 2014), 57% spending less on clothing (down from 59%) and 53% spending less on out-of-home entertainment (up from 52%) and buying cheaper brands at the grocery store (up from 45%).

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