Consumer confidence is suffering an unprecedented decline

Nearly four-fifths of Canadians expect the economy to worsen over the next few months

Consumer confidence is suffering an unprecedented decline

Canadians’ confidence towards the housing market, their finances, and their jobs has significantly worsened over the past few weeks, according to a new survey.

Describing the decline as a “historic slide,” the latest edition of the Bloomberg Nanos Canadian Confidence Index plunged to its lowest level since 2008, registering a 38.7 reading as of April 13.

The gloomy outlook especially applied to the residential property market: The share of Canadians who are expecting home prices to decline was at 41%, versus the mere 13% just a month ago.

Meanwhile, 79% said that they are bracing themselves for the economy to deteriorate over the next half-year, far above the previous record of 57% seen during the 2008-09 recession.

The extraordinary economic damage brought about by the coronavirus pandemic has pushed the Bank of Canada to slash its interest rates several times over the past few weeks. Economists have stated that the market should expect more movements in the same vein as the situation continues to evolve.

“[The cuts] are clearly targeting financial market plumbing here,” Manulife Investment Management Chief Economist Frances Donald told BNN Bloomberg late last month. “This is not about preventing a recession. There’s very little the Bank of Canada can do to prevent the job losses that are coming in the next couple of weeks and months. What they can do is make sure the financial markets are behaving properly.”

The fraction of Canadians who reported weaker personal finances over the past year reached a record high of 36.9%. Another 22.3% expressed fears about losing their employment, the highest proportion since 2013.