Spending takes a blow as confidence drops: report
Consumer confidence is the lowest it has been since July 2010, according to a study from market research firm TNS.
Big ticket items will likely not make the shopping list for the next while as Canadians exhibit a “glass half empty” attitude surrounding the economy, reported by TNS in its recent Consumer Confidence Index study.
The report affirms that the index is down, having dropped 1.9 points in July to 94.6 (from 96.5 in June), the lowest it’s seen since July 2010. The Expectations Index – measuring consumers’ outlook for the economy six months from now – also bares dismal news of a low index, where it nosedived by two points from 99.3 to 97.3 this month.
Media reports on the economy rule fluctuating consumer opinions, Norman Baillie-David, VP qualitative and public opinion, TNS, tells MiC, adding that the research firm “attributes the drop this month not so much to any overwhelming bad news, but to a longer period without any real good news.”
“Without the good economic news story once in a while to lift spirits, confidence tends to exacerbate the current trend, which right now is on a down slope,” he explains.
Cheque books tend to be void of big purchases when consumer attitudes are low, further proven with the report asking respondents whether they believe now is a good time to purchase items such as a car or major household appliances. The negative responses led to the Buy Index also taking a dive, shifting two points from 93.8 to 91.8.
Baillie-David says in the report that of all the findings, “this drop is the one that causes most concern” and that “when they decide not to make major purchases as a result [of media reports], this is bad news for the economy if they follow through.”
Next week will see TNS compare the Canadian results, taken from national bi-weekly telephone interviews with 1,015 adults, with that of the US, which it does on a quarterly basis.