December Consumer Confidence Retreats

The Conference Board of Canada’s Index of Consumer Confidence retreated seven points in December to 101.2, the largest drop in three months. The decrease was seen across Canada and is now at its lowest point since April this year. Canadians’ concerns over current finances remained relatively unchanged in December, with 12.3 per cent of those surveyed positive about their current financial situation. However, reservations about future finances were evident, with a two percentage points decrease in the share of respondents feeling optimistic about their future finances. Reluctance over making major purchases remained broadly the same as the previous month, with only 18.3 per cent of survey respondents believing now is a good time to buy large-ticket items. At the same time, with job growth picking up sharply in November, 24 per cent of Canadians are confident about their future job prospects. Though this figure is lower than last month, it still exceeds any pre-pandemic high. The board says the Omicron variant is disrupting consumers’ plans and creating an uncertain environment. Data shows that Canadians have already reduced their visits to restaurants. Depending on the severity of infections and hospitalizations, there could be a further decline in consumer confidence in the coming months until booster shoots become more widely available. As well, Omicron’s rise could further disrupt supply chains, adding to Canadians’ inflation woes.