Consumers trying to avoid debt as they pay off holiday bills
TORONTO, Feb. 8 /CNW/ - Canadians are less optimistic about the outlook
for the national economy and their personal financial situation in 2011
than they were last year, according to the January 2011 RBC Canadian
Consumer Outlook Index (RBC CCO). Less than half (43 per cent) of
Canadians feel the economy will improve over the next year, a marked
decline from the 56 per cent reported in last January's RBC CCO. In
addition, only 38 per cent of Canadians now feel their personal
financial situation will improve over the next 12 months, compared to
45 per cent a year ago.
The prevailing mood was reflected in the tight rein many Canadians kept
on their expenses over the past holiday season, with 67 per cent
responding that they managed not to overspend their holiday budgets. Of
this majority, 28 per cent reported they had kept track of their
spending by making a budget and sticking to it; 26 per cent stated they
knew how much they had to spend and "once the money was gone, that was
it". By far, the largest number of respondents (46 per cent) said that
they stayed within their budget because they didn't want to go into
debt or increase their debt load.
"We know that managing debt is top of mind for Canadians. Having a
budget in place that you can stick to is one of the best ways to keep
your finances in balance and take care of any debts," said Ashif
Ratanshi, head, Branch Investments, Deposits and Direct Investing, RBC.
"This also gives you a good base from which to do your financial
planning for the year. Ideally you want to ensure you are saving money
for your future as well as covering your expenses today. Good financial
advice can help you do both."
Despite the cautious economic outlook expressed by the majority of
Canadian respondents, there are indications that Canada's economy will
continue to grow in 2011 and 2012.
"While the pace of the recovery will remain moderate, we are projecting
growth of 3.2 per cent this year and 3.1 per cent in 2012, representing
the fastest pace of growth over the past four years," noted Craig
Wright, senior vice-president and chief economist, RBC. "As the economy
continues to expand, we expect interest rates to drift moderately
higher through the coming year. This should limit pressure on household
balance sheets in an environment of continued employment gains."
Other highlights from the RBC CCO include:
RBC Canadian Consumer Outlook Index: Overall, the RBC CCO Index dropped from 106 points in January 2010 to
93 in January 2011.
National Economic Outlook: While only 43 per cent of Canadians feel the economy will improve over
the next year, Albertans are much more optimistic (61 per cent) and
Quebecers less optimistic (32 per cent) than the national average. As
for the current state of the economy, 60 per cent of Canadians describe
it as "good", with the Prairies (77 per cent) and Alberta (75 per cent)
feeling the most positive.
Personal Financial Situation Outlook: The number of Canadians who generally feel that their personal financial
situation will improve over the next year dropped to 38 per cent from
45 per cent in January 2010. Albertans are the most optimistic about
their personal financial situation (48 per cent), Quebecers and
Ontarians are the least optimistic (35 per cent and 36 per cent
Job Anxiety Outlook: Nationally, job anxiety has eased compared to a year ago. This year, 20
per cent of Canadians surveyed stated that they are - or someone in
their household is - worried about losing their job or being laid off,
a drop from 26 per cent in January 2010. Job anxiety was highest in
Ontario (23 per cent) in January 2011 and lowest in the Prairies (15
Holiday Season Expenditures: Of the one-third (33 per cent) of Canadians who overspent their holiday
budgets, the over-expenditure averaged $430. Atlantic Canadians were
the most likely to overspend (37 per cent), and overspent by the
largest amount ($521). Of the two-thirds (67 per cent) of Canadians who
stayed within their holiday budgets, those living in Quebec and B.C.
were most likely not to overspend (72 per cent and 70 per cent
About RBC's financial advice and interactive tools
RBC's myFinance Tracker is a new online financial management tool that offers all personal RBC
online banking clients the ability, at no cost, to create a set budget
and track their spending habits. In addition, whether Canadians want to
get more from their everyday banking, protect what's important, save
and invest, borrow with confidence or take care of their businesses,
the RBC Advice Centre (www.rbcadvicecentre.com) can help answer their questions. Advice videos are updated regularly
to reflect current trends and to answer the questions that are top of
mind with Canadians. Interactive tools and calculators provide
customized information covering many facets of personal finance. With
the guidance of RBC advisors who are available to chat live, Canadians
have access to free, no-obligation professional advice about RBC
products and services and personalized one-on-one service.
About the RBC Canadian Consumer Outlook Index
The RBC Canadian Consumer Outlook Index, benchmarked as of November 2009, is conducted online via Ipsos Reid's
national I-Say Consumer Panel to 3,533 Canadians (503 British Columbia,
476 Alberta, 589 Saskatchewan/Manitoba, 721 Ontario, 678 Quebec, 566
Atlantic Canada). Weighting was then employed to balance demographics
and ensure that the sample's composition reflects that of the adult
population according to Census data and to provide results intended to
approximate the sample universe. Data collection was January 4 to 10,
2011. A survey with an unweighted probability sample of this size and a
100 per cent response rate would have an estimated margin of error of
±1.65 percentage points, 19 times out of 20, of what the results would
have been had the entire population of adults in Canada been polled.
For further information:
Kathy Bevan, RBC Corporate Communications, (416) 974-2727
Gillian McArdle, RBC Media Relations, (416) 974-5506