OTTAWA - The Conference Board of Canada's latest consumer confidence numbers are back to where they were around the height of the 2008-2009 recession, a troubling sign of what's to come for the Canadian economy in 2012.
The Ottawa think-tank said Thursday its Index of Consumer Confidence posted a 6.5-point drop in December, bringing 2011 to a "disappointing" close and signalling that further belt-tightening by Canadians is in store.
"We've always seen a link between the consumer confidence level today and consumer spending six months down the road," said board economist Todd Crawford in an interview.
Canadians tend to think their economy is based mainly on exports -- and those do play a big role -- but a decline in consumer spending is not to be taken lightly, Crawford said.
"I think that's why most people, and certainly us, are expecting (gross domestic product) growth in Canada to slow over the next two to three quarters."
At 69.9, the index is at its lowest point in more than two and a half years and down 11.1 points form where it was at the end of 2010.
The board uses a 2002 base of 100 in compiling the index, which reflects how Canadians feel about the economy, job creation, future major purchases and their personal finances.
The board said opinion eroded on all four questions, but responses to the major purchases question were particularly gloomy.
In December, just 34.1 per cent of respondents said now is a good time to buy a big-ticket item like a car or an appliance, down 1.9 percentage points from November and the eighth consecutive monthly decline.
More worrisome is that 54 per cent said now is a bad time to make a major purchase, up 3.5 percentage points from last month and more than 10 points higher than a year ago.
More than 27 per cent of respondents said they expected fewer jobs in their communities -- the highest level since the summer of 2009 when the recession was hitting full force.
While confidence was down across the country, some regions had a gloomier view than others.
The biggest drop was in Atlantic Canada, wiping out a recent gain after the Halifax Shipyard won a $25-billion shipbuilding contract earlier this fall.
British Columbia registered a third consecutive monthly decline, and confidence also dropped in Ontario and Quebec, the heart of Canada's manufacturing sector.
The Prairies, where the natural resources sector remains robust, was something of a bright spot.
"While we saw a broad-based decline everywhere else, the decline in the Prairies was sort of insignificant this month," said Crawford.
"I think we can tie that back to the resource-based economies out West. Obviously in Alberta, we're seeing oil prices really have not dropped -- they have dropped some, but certainly not a remarkable drop like we saw during the recession of 2008-2009."
