Canadians upbeat on personal finances

Canadians’ improving personal finances have snapped a four-month slide in consumer confidence, the Conference Board of Canada reported Thursday.

The board’s confidence index rose 1.5% in October to a reading of 79.7%, despite weakness in three of the four measures that make up the survey. An even reading for the index is 100.

The gain was apparent across the country, with the exception of the Atlantic region.

“The share of respondents expressing a positive view of their current finances increased dramatically in October,” the report said.

When asked if their financial situation had improved over the past six months, 17.5% responded positively, a gain of 4.3 percentage points from September and the highest reading of the year.

The advance comes on the heels of a fall stock market surge that has lifted the TSX composite index by more than 13% since early July.

Those saying their finances had worsened fell by 1.5 percentage points to a reading of 21.7%.

But the weakness in other areas of the poll, based on 2,000 telephone interviews conducted in early October, suggested this months’ gains could be elusive

On the employment front, for instance, “consumers are showing little faith in the recovery in Canada’s labour markets,”the report said.

Only 17.8% of respondents said they expect employment in their communities to rise over the next six months. The number who expect fewer jobs rose to 20.5%, up from 20.1% in September.

Weakness in the labour market cuts into consumer spending, another area where the survey showed potential weakness ahead.

Asked if they thought it was a good time to make a major purchase, only 41% said it was. Those saying it was a bad time to do so rose to 47.9%.

“The balance of opinion on this question has completely reversed since the beginning of the year, when positive responses outweighed negative ones by a significant margin,”the report said.

Consumers’ outlook for future finances could also suggest weaker spending ahead, as only 22.9% said they expect their financial situation to improve in the coming six months. The figure is 1.6 percentage points lower than one month ago and 10.6 percentage points lower than at the start of the year.

Regionally, the Prairies remained the region with the highest level of consumer confidence, rising 3.1 percentage points to a reading of 99.3.  Ontario continues to lag “well behind” other regions, with a gain of 1.4 points to 68.7, the report said. Quebec rose 1.7 points to 80.8, while British Columbia rose 3.5 points to 83.

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John Morrissy, Financial Post

Pam Martin, Invis, Mortgage Broker, mortgage, Kelowna,Vernon, Penticton, Okanagan, British Columbia, Canada