Consumer confidence is now the lowest it has been in Canada since the COVID-19 pandemic began, according to new survey data.
Numbers released by the Bloomberg Nanos Canadian Confidence Index show confidence has tanked at 54.3%, including a 1.8% decline last week alone.
The drop is the worst single-week decline since April 2020 when provinces went into lockdown.
Rising cost of living, higher rates and the ongoing war in Ukraine are believed to be among the contributing factors.
The weekly index surveys 250 Canadians on various topics including personal finance, the economy and real estate.
39% of those polled said that their personal finances have gotten worse in the last year. Additionally, half of those surveyed said that they expect the economy to be weaker, while only 18% expected a stronger economy.
Economists recently warned Canadians that they should brace themselves for a recession and further interest rate hikes.
A survey targeting the country’s top economic minds found that most agree that Canada is headed for a recession by 2024 at the latest. A majority of those polled said it could arrive as soon as the first six months of 2023.
“(It) largely depends on how prolonged the supply-side issues will be and the escalation for the Russia-Ukraine war,” said economist Murshed Chowdhury.
New International Monetary Fund projections also reported that Canada’s expected GDP growth for this year shrank by 15% in comparison to 2021.
“Multilateral efforts to respond to the humanitarian crisis, prevent further economic fragmentation, maintain global liquidity, manage debt distress, tackle climate change, and end the pandemic are essential,” wrote the IMF.
The consumer confidence numbers also come on the heels of a recent survey showing that 43% of Canadian non-home-owners were putting off a home purchase. Last year that figure was 33%, while in 2020 it was only 20%.
“Rapid price escalation in the early months of 2022 has already raised the bar to impossible levels for many homebuyers,” said RBC senior economist Robert Hogue. “Worst-ever affordability levels could well ensue, putting buyers in a precarious spot.”
According to the RBC housing affordability measure, affordability is the worst it has been since 1990.
