TORONTO, Feb. 16, 2012 /CNW/ - After a very encouraging surge of consumer confidence in January, Canadians have reverted to a more jaded view of the economy and their own prospects, according to the latest consumer confidence survey conducted by TNS Canada. After a dramatic rise to 98.6 in January, the TNS Canada Consumer Confidence Index dropped back to a more 'normal' level of 95.1 in February.
"Canadians don't know what to think about the economy anymore, and confidence is going up and down on a roller-coaster ride of sorts" said Norman Baillie-David, Vice President of TNS Canada and Director of the Marketing and Social Research firm's monthly tracking study. "Consumer confidence has now become a function of the latest media report, not to mention just the mid-winter blahs. Economic news is positive some days, and negative other days; whether it be job reports, or the situation in Europe or the United States, there is no consistency or trend in confidence right now. It's all over the map."
The Present Situation Index, which measures how people feel about the economy right now, dropped 5.5 points, from 97.9 in January to 92.4 in February, losing any gains which were made in January. Unfortunately, this indicates that any New Year's optimism reported last month has since dissipated, and that Canadians are feeling considerably worse about their situation right now compared to a month ago. "One of the contributing factors to this is imminent public sector cuts in most jurisdictions around the country, combined with what is felt to be a rather bleak job situation generally", explained Mr. Baillie-David.
The Expectations Index, which measures people's outlook for the economy six months from now also dropped slightly, from 102.9 in January to 101.6. "Even with this slight decline, this still says Canadians are relatively optimistic about the next six months, at least they still think that things will get better, and not worse" added Mr. Baillie-David.
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, is perhaps the most important of the sub-indices, because if people feel now is a good time to buy, they may act on it, which will provide the real economic stimulus. The Buy Index dropped three points in February, from 95.2 to 92.2, meaning more people have decided to put off any big purchases for the time being. "Not a good news story for car, furniture or appliance dealers - it means they likely will have to be more aggressive with discounts and financing to get people out; however, with March and the beginning of the new house-buying season, this should be temporary." said Mr. Baillie-David.
All in all, our Consumer Confidence Index is showing that consumers' are going through a bumpy ride, without a clear trend either up or down.
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 6 and February 10, 2012. 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.
TNS Canada (formerly known as TNS Canadian Facts) is the Canadian arm of TNS. TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world's consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world.
TNS is part of Kantar, one of the world's largest insight, information and consultancy groups.
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