Consumer confidence in Canada continues to shrink, with the Bloomberg-Nanos Index indicating a third-straight decline with ratings at its lowest level since mid-August, according to Canadian Black Book’s latest COVID-19 update.
“This past week the Bloomberg-Nanos Consumer Confidence Index concluded only 12.9% of Canadians believe the country’s economy will strengthen in the next six months,” said CBB in its report. “This is the smallest number since early May.”
The barometer of consumer sentiment has fallen for four straight weeks, following a pandemic high of 53.2 late last month. CBB said the number of survey respondents who think the Canadian economy will weaken in the next six months is up 56%.
CBB is concerned about the tone of the survey, because a lack of confidence could result in consumers stalling on plans to replace their current vehicle until they feel the economy is doing better. That, paired with the fact that vehicles are being driven less amid the pandemic, could have a “cooling effect” on new and used vehicle sales.
“Typically, this could also lead to higher levels of incentive spend by OEMs, to motivate consumers to visit a showroom,” said CBB. “Of course, there is a limit to how much an OEM can spend on buying sales through incentive dollars. This pandemic may challenge limits on incentive spending further, later this year and into 2021.”
Confidence among small businesses in Canada also declined, to its lowest level in five months. The Canadian Federation of Independent Business Index, which measures confidence among small businesses in Canada, dropped nearly six points in October to 53.3 — the largest decline since March, and the lowest level since May.
Future employment plans for small businesses are also down, with 28% of businesses planning to decrease full-time staff within the next three months. Only 12% plan to increase staff during the same period.
The full report can be found here.
