April 2009

Editors Letter
If you do the math, things are looking up…a bit By Pat Atkinson

A recent survey by the Conference Board of Canada suggests we are starting to feel better about this country’s economic future, although consumer confidence is still low largely due to employment insecurity.

In March, the Consumer Confidence Index increased by 2.7 points from February with fewer respondents reporting concerns about job loss and more of them agreeing it is a good time to make a major purchase. In fact, some 34.7 percent of the 2,000 people interviewed said it was a good time to make such a purchase — up 4.6 percentage points from February.

This could be good news for marketers, although it could denote that purchasers are expecting significant discounts. Interestingly, a mere 20.5 percent of the confidence poll respondents said they expect their financial situation to improve over the next six months (a decline of 1.5 points). And when asked whether their situation had improved over the past six months, most reported it was unchanged.

“It appears that most people feel unaffected by the ongoing Canadian recession and believe they will continue to be unaffected going forward,” the Conference Board reported in a statement.
The Conference Board reports that regionally, consumer confidence is rising most in Atlantic Canada, while BC residents continued to be the most optimistic with an overall index of 82.6. Ontarians, battered by the manufacturing slump, were most pessimistic at 66.3.

Meanwhile, Pitney Bowes Business Insight, (PBBI) a leading global provider of location and communication intelligence solutions, announced research findings on regional disparities and the likely impact of the economic downturn on large cities. Utilizing its Canada Wealth data set, which provides information on Canadians’ financial characteristics at the neighbourhood level, PBBI revealed that Vancouver, Toronto and Calgary are the large Canadian cities with the highest household wealth, while Halifax, London and Montreal are the least wealthy among large Canadian cities. In fact, the wealth in these cities is nearly half that of the top five.

To identify the Canadian metros feeling the greatest impact from the economic crisis, PBBI applied the percentage change in the Bank of Canada’s S&P/TSX Composite Index between December 2007 and December 2008 (a decrease of 35 percent) to the average household values of equity holdings. The top five metros with the greatest loss in average household equity holdings include (in descending order): Calgary (-$29,607); Toronto (-$21,396); Edmonton (-$21,127); Ottawa-Gatineau (-$19,889) and Oshawa (-$18,706). The complete findings appear in the latest issue of Momentum: Demographic Insights™, a quarterly research report focusing on Canadian demographic trends and forecasts important to business leaders.

Further proof of optimism comes from a report released on March 25th by Environics Research Group. It indicates that although Canadians are showing high levels of concern about the current state of the economy, they are also among the more optimistic publics worldwide about the timing of the recovery, and their own personal financial futures. Seven in ten Canadians expect the recession to last no more than two years; and three in ten Canadians are currently worried about the prospect of losing their jobs, well below most countries globally. Across Canada, Albertans stand out as most worried and residents of Manitoba and Saskatchewan the least. To view the full report, visit http://erg.environics.net/media_room/default.asp?aID=697.