Greater consumer confidence fuelled by a largely averted 2023 recession, study suggests
The number of Canadians concerned about a recession in the upcoming year has fallen on an annual basis, according to a recent survey by BNN Bloomberg and RATESDOTCA.
Conducted from Dec. 8 to 10, the poll found that 72% of Canadians indicated lingering worries of a recession in 2024. This was a marked drop from the 81% reading a year ago.
At the other end of the spectrum, 25% of respondents said that they were not worried about a recession, versus the 15% share a year ago.
Predictions of a “severe” recession in 2023 have not panned out, largely counteracted by Canadian consumers posting accelerated levels of spending in recent months, according to the national statistics agency.
Statistics Canada figures indicated that retail sales grew by 0.6% to $66.5 billion in September, with overall retail sales volume growing by 0.3%.
In the wake of the Bank of Canada’s unprecedented 475-basis-point rate hike, inflation has essentially proved sticky despite significantly falling from a peak of 8.1% last year.
The Canadian inflation rate stood at an annualized pace of 3.1% in November, according to Statistics Canada.
— Canadian Mortgage Professional Magazine (@CMPmagazine) December 21, 2023
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Still, the poll found that 81% of Canadians aged 18 to 34 remain worried about the prospect of an economic downturn. Among respondents aged 55 and older, 67% expressed similar fears.
Despite these apprehensions, the study found that only 58% of Canadians were actively taking measures to brace for a possible recession. Among the prepared respondents, 35% said that they were cutting down on spending and allocating more funds towards savings, while 16% were directing their efforts towards debt reduction.
Another 11% said that they were maintaining liquidity, preferring cash over investment options. An equal share (11%) said that they were adopting multiple strategies to shore up their finances against a potential downturn.
