A TransUnion Canada Consumer Pulse study that took place during the second quarter of the year found that Canadians (37%) plan to significantly cut down on large purchases, as microeconomic pressures remain at the forefront of consumer concerns.
This includes inflation and rising interest rates, two areas that affect consumer behaviour. The study found that demand for credit has declined, while a focus on saving money is on the rise. Debt is also among the main concerns for Canadians, as are potential cybersecurity threats.
“While there is a mixed level of confidence in Canadians’ financial outlook, macroeconomic pressures remain top-of-mind for many,” said Matt Fabian, Director of Financial Services Research and Consulting at TransUnion Canada, in a statement. He said concerns about inflation (47%), rising interest rates, housing affordability, and the perceived threat of a possible recession (11%) are affecting how consumers in Canada are managing household spending.
“Overall, the study indicates that Canadians are taking a prudent approach in managing their finances in the face of economic uncertainty, including reining in spending, stockpiling savings, and managing their debt levels. Not just in view of today’s financial challenges — but in preparing for what’s ahead,” added Fabian.
Forty-eight per cent of consumers indicated they don’t want to go into debt, and 32% don’t need credit. Higher interest rates for 57% of those surveyed are affecting their decision to apply for additional credit or refinance within the next 12 months — with 24% expected to apply during this period. Forty-six percent of consumers that can apply will be eyeing credit cards, followed by personal loans (26%) and mortgages (18%).
The survey measures changing consumer attitudes and behaviours based on the dynamics of income, debt and identity theft.
