Canada’s suddenly jittery economy is facing another headwind: wavering consumer confidence.
Economic sentiment cooled for a second straight month in February, according to polling by Nanos Research Group for Bloomberg News, with Canadians increasingly concerned about the sustainability of the nation’s expansion.
It’s been a dramatic reversal in consumer confidence. Over the past two months, sentiment has dropped from near record highs to below average levels, reflecting an overall deterioration in economic conditions for households. These include three rate hikes by the Bank of Canada since July, a weakening Canadian dollar, sharp declines in stock prices, renewed worries about the housing market and a slowing economy.
“Household equity holdings have lost 4 percent of their value; new regulations and higher interest rates are likely to have a moderating effect on home values; and the economy appears to be taking a breather after last year’s rapid growth,” said Bloomberg economist Robert Lawrie.
The Bloomberg Nanos Canadian Confidence Index — a composite gauge based on survey questions — was at 57.7 for the week ending March 2. That’s down from 59 at the end of January and 62.2 at the end of 2017, marking its biggest two-month decline in two years. The index has also fallen below year-ago levels for the first time in more than 12 months.