Consumer confidence cogs start turning in Canada

Boston Consulting Group have just released a very interesting survey for business owners in Canada which reveals that Canadian consumers appear to be more confident than those in the US or Europe, the same report shows that consumers are now far more cautious in spending but that there is fairly firm optimism underpinning the habits related to spending. The comprehensive report is called ‘The New World Order of Consumption’ and surveyed 1,000 Canadian adults with household incomes in excess of CA $50,000 per year. Of those questioned just 18% of Canadians feel that the economy will not be improving over the next six months, those numbers are stunning when compared with the 52% who felt pessimistic when posed with the same question 12 months ago. To contrast 37% of U.S. residents and 39% of European Union residents answered that they don’t feel that the overall economy will improve in the next six months.

Cliff Grevler a partner in the Toronto office of BCG office stated:

“Canadian consumers believe the worst of the recession is over and are more optimistic than they were a year ago. In fact, they’re significantly more confident about the economic future and their jobs than consumers in other Western economies,”

He also added that the recession has left a bitter aftertaste that won’t go away anytime soon. The poll shows 74% of Canadians are now willing to spend additional time shopping around for better prices and that some 55% plan to continue cutting spending on non-essential purchases. Caution remains the watchword of the day.

“While belt-tightening is lightening up a bit, Canadians have structurally changed the way they spend and consume. It’s much more focused on price, and there’s much more thought given before expenditures on non-essential items,” he said.

The survey conducted by Research Now in early April 2010, placed questions in concert with a very similar survey that was completed 15 months prior in late December 2008. Similar surveys were compiled in the US and Europe with all data pointing to greater confidence amongst Canadian spenders. Few expect to see ‘carefree’ spending return to any market mentioned in the short term, especially while composite household debt remains at record levels throughout the economies in question. Stage one of a recovery however is to simply get the wheels spinning again and while caution continues to cast a huge shadow over spending at all levels at least the average consumer senses that the recovery is lasting. For businesses these means that competitive pricing and improved efficiencies must be merged to deliver new clients. Service expectations haven’t changed but a general culture of thrift has emerged from the economic trauma of recent years. While the expectations are that the growth in GDP is almost assured the overall recipe is something that needs a cautious overview throughout 2010. Would you while reading this article have answered that you feel the economy looks set to improve over the next six months? Also, would your basis be fueled by reports or your actual observations?

I’ll be back in the days ahead to see how markets, currencies and labour statistics align with some of these newer reports.

Statistics for this article courtesy of Reuters