Has Consumer Pessimism Peaked?

    WINNIPEG, Aug. 28 /CNW/ - The latest Harris Decima Investors Group
measure of Canadian Consumer Confidence reveals:

    -   The overall index of Consumer Confidence rose slightly in Canada, in
        the period from May through August. The index is based on five
        specific questions which probe sentiment about current and future
        economic conditions. During the same period of time, the parallel
        University of Michigan Index continued to fall.

    Several of the five components that make up the index showed statistically
significant shifts during the last few months:

    -   Pessimism about the economic outlook for the coming year dropped from
        38% saying things would be worse to 32%. A smaller drop was recorded
        in pessimism about the five year outlook, from 46% to 43% expecting

    -   The number of people who say they expect their personal financial
        situation to deteriorate in the coming year also slid by 3 points,
        from 20% to 17%. The number of people who say they are worse off
        today than they were last year, held steady at 24%.

    -   The one negative movement was recorded on the question of whether now
        is a good time or a bad time to make a major purchase. Those saying
        it is a "bad time" rose marginally from 41% to 42%.

    -   While pessimism has declined, it has not yet been replaced by growing
        optimism. All five indicators showed no statistically significant
        gains in optimism, meaning growing fear in May has shifted into
        growing uncertainty in August.

    -   Regional variances in consumer confidence remain interesting. This
        time last year, Canadians living west of the province of Ontario, had
        a confidence level that was 10-points higher than their eastern
        counterparts. Today, east and west confidence levels are identical.

    -   Finally, given the potential for a fall federal election campaign,
        it's useful to assess the degree to which economic sentiment will
        matter in terms of political choice. Among those who think the next
        year will bring good times for Canada, 34% would vote Conservative,
        31% support the Liberals. Those who are pessimistic about the next
        year would vote in equal numbers for the Conservatives and Liberals
        (33% each). Those who are optimists about the five year economic
        outlook, show a two point advantage for the Conservatives (36%,
        Liberals 34%), while those expecting the economy to be worse off in
        five years lean towards the Liberals (31% - 28%).

    According to Harris/Decima President Bruce Anderson, "These patterns
suggest that Canadians have anxieties about the economy, but are resisting
becoming too fearful. The fact that 17% think they will be worse off next
year, and 25% think they will be better off also is continuing evidence that
most people are not seeing the wolf at the door. Finally, to date, the
political consequences of the economic mood may seem modest, but given the
close nature of the national race between the Conservatives and the Liberals,
a few percentage points make a difference. Any evidence that pessimism may
have peaked, at least for the moment, is good news for the Harper
    Bill Chornous, Vice-President and Investment Strategist at Investors
Group said, "With the recent decline in the price of oil, the prospect of
lower gas prices may have reduced some of the price concerns of Canadian
consumers. The influence of these price declines is reinforced by the
uniformity of responses and consistent confidence levels across the country.
This also explains why although optimism is not on the rise, pessimism is now
    Each week, Harris/Decima interviews just over 1000 Canadians through
teleVox, the company's national omnibus survey. These data were gathered
August 7th through 17th 2008 for a sample of just over 2,000 respondents. The
poll's margin of error is 2.2%, 19 times out of 20.

For further information:

For further information: Bruce Anderson, President, Harris/Decima, Tel:
(613) 230-2200, banderson@harrisdecima.com, harrisdecima.com

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