OTTAWA (Reuters) - Canadian consumer confidence rose in October for the first time in five months as optimism about current personal finances outweighed gloominess about other issues, the Conference Board of Canada said on Thursday.
The consumer confidence index rose 1.5 points to 79.7, reversing September’s decline and returning to levels of roughly a year ago.
“The increase was due entirely to a more positive outlook on the current finances question, which outweighed the negativity on the three other questions,” the Conference Board said of its more than 2,000 telephone interviews conducted in early October.
Asked if their personal finances had improved over the past six months, 17.5 percent said yes, up 4.3 percentage points from September to the highest level since the start of 2010.
But Canadians were more downbeat than they were in September when asked about their future finances. Overall, 71.4 percent said they expected no improvement over the next six months -- the highest negative response since monthly sampling began almost nine years ago.
Asked whether now was a good time to make a major purchase, 47.9 percent said no and 41 percent said yes, a dimmer view than in September and reversing the trend seen earlier this year.
The balance of opinion on future employment was largely unchanged from September, with only 17.8 percent expecting more job creation in their communities in the next six months.
“Despite the fact that employment levels have returned to their pre-recession levels, consumers are showing little faith in the recovery in Canada’s labor markets,” the report said.
Canada’s economic recovery began in late 2009 but following a period of galloping growth, it has lost some steam. The economy grew at 2 percent in the second quarter, annualized, less than half the rate of the previous two quarters.
The faltering U.S. economy and tensions in global currency markets combined with a cooling domestic housing market and a consumer slowdown mean Canada’s recovery will be more prolonged than previously envisaged, analysts say. The Bank of Canada sees growth continuing to slow in the third quarter before picking up again.
The survey of consumer confidence was conducted between October 7 and October 17, and the margin of error is plus or minus 2.2 per cent.
Reporting by Louise Egan; editing by Peter Galloway