Consumer confidence rose in Canada in June, pointing to what the Conference Board of Canada says will be a "soft recovery coming out of a very deep recession."
The latest report from the group was released on Monday. It shows a rise of 0.7 points from the previous month, suggesting Canadians are feeling more optimistic about their financial futures and the job market, said Pedro Antunes, director of national and provincial forecast for the Conference Board.
"We saw consumer confidence fall off sharply since about mid-2007. We've seen a big decline in the index and finally we're seeing a turnaround. And hopefully that shows consumers are feeling better about the economy," Antunes told CTV's Canada AM on Monday.
"There has been good news out there that shows consumer spending will pick up as we look ahead to the second half of 2009."
The group is predicting moderate growth in the second half of 2009, before an economic turnaround begins in 2010, followed by a strong upswing by the start of 2011.
The June increase brings Canada's consumer confidence index to 82.1 and marks the fourth consecutive monthly increase.
Overall consumer confidence has climbed 10.6 per cent since March.
Confidence in the possibility of future employment rose for the third straight month, but attitudes towards major purchases declined.
Antunes said low interest rates have helped lift consumer confidence, but pointed out that the North American economy still faces fundamental challenges such as high unemployment.
"Even though we are seeing consumer confidence pick up in Canada and the U.S., when we look at employment numbers they are still seeing declines in Canada and the U.S.," Antunes said.
"So overall we're probably not going to see a huge pickup in income, which is what drives consumer spending ultimately, until next year. So that's going to hold back this recovery to be a relatively soft recovery coming out of a very deep recession."
Following are some key points from the report:
- 12.8 per cent of consumers feel their family finances got better in the last six months (an increase of 1.4 points).
- 28.1 per cent of consumers feel their finances deteriorated in the last six months (a drop of 1.3 points).
- 27 per cent of Canadians feel their finances will get better in the next six months.
- 16.9 per cent of Canadians feel there will be more jobs in six months
- 41.3 per cent of Canadians feel now is the right time to make a major purchase (a drop of 3.7 points), whereas 47.7 per cent of Canadians feel now is a bad time to make a major purchase (up 3.2 per cent)
