While consumers in many parts of the world have been expressing renewed confidence over the past three to four years, Canadian sentiment has been heading in the other direction.
According to GfK’s new Mood of the World Report, just 16% of Canadians say they are “very confident” they will personally be better off in 12 months, half the global average of 32%. Another 41% are “somewhat confident,” slightly higher than the global average of 36%.
Overall, the proportion of Canadians expressing at least some confidence (“very” or “somewhat” confident) about their prospects for the coming year is 57% – well below the average of 68% for consumers in the 22-country survey.
The top three concerns of Canadians are all related to finances:
1. Having “money enough to live right and pay the bills” – mentioned by 48%
2. Inflation and high prices – 45%
3. Recession and unemployment – 30%
Canadians are also markedly more likely than the average consumer globally to be worried about having enough money (+12 percentage points) and inflation (+10 points).
In addition, Canadians are less likely to be planning purchases in eight of nine major categories measured, from gadgets to homes. Major differences came in the areas of personal electronics (14 percentage points below the global average), home appliances (13 points below average), and home electronics (12 points below).
“We have seen a variety of factors collide to take a bite out of Canadian confidence,” said Angelo Pierro, Managing Director of GfK Canada. “Our currency has devalued 25% since 2013, mainly due to the drop in oil prices, putting a crimp in our buying power. Add to this soaring urban housing costs and high Canadian debt rates, and it is not hard to understand why consumers are feeling uncertain.
“The bright silver lining on a weaker dollar is the attractiveness of our raw and manufactured materials,” Pierro said, “which Bank of Canada corroborates, as our exports are at highs not seen in several years. Recent mortgage lending regulations aimed at simmering an exuberant housing market should help manage affordability issues for first-time buyers.”
The Mood of the World findings are drawn from GfK Consumer Life’s annual global survey, based on 28,000 interviews of consumers age 15 and older in 22 countries. GfK Consumer Life has conducted the survey every year since 1997.