Canadian consumer and business confidence mixed

Tue Jul 27, 2010 3:13pm EDT
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By Ka Yan Ng

OTTAWA (Reuters) - Consumer confidence in Canada faltered for a second straight month in July with optimism on jobs taking the biggest hit, but business sentiment was generally upbeat, two surveys showed on Tuesday.

The Conference Board of Canada said a drop in optimism was felt across all regions with the biggest fall in British Columbia. Respondents were less rosy about jobs, current income, and making major purchases.

Overall, consumer confidence fell 3.7 points in July from June to a level of 80.0 on the Conference Board's scale.

By contrast, the Canadian Institute of Chartered Accountants (CICA) and Royal Bank of Canada said optimism about the future prospects of the domestic economy has been sustained after sharply rebounding over several quarters.

The CICA/RBC Business Monitor for the second quarter showed 57 percent of top level executives with first-hand knowledge about the financial performance of Canadian companies indicated they were optimistic about the economy's prospects over the next 12 months. That was down slightly from 61 percent in the first quarter.

But measures for the next 12 months relating to revenues, profits and employment numbers showed positive projections from the executives. Optimism was at levels well above the 28 percent seen a year ago, and running close to the peak of 67 percent reached in the second quarter of 2007.

"Significant distance has been traveled on the journey toward economic recovery but many executive (chartered accountants) are not prepared to let their guard down," said Kevin Dancey, CICA's president and chief executive.

The pair of surveys appear to back a recent view by the Bank of Canada, which said that the consumer has carried the Canadian economy out of recession, but business investment has not bounced back after shrinking during the recession.   Continued...