(Bloomberg) — Canadian consumer sentiment rose last week as opinions on personal finances improved with falling gasoline prices.
The Bloomberg Nanos Canadian Confidence Index climbed to 58.8 for the week ended Aug. 15 from 58.6 the previous week. The survey-based index climbed for the first time in four weeks after declining from close to a four-year high, as sentiment about the national economy and real-estate prices improved last week while views on job security dimmed.
A gauge of personal finances recorded its best score since March amid dropping gasoline prices. World oil prices have been on a steady decline since June, with futures down 0.3 percent last week, on signs of slowing demand, driving down prices in Canada.
The rack price for unbranded regular gasoline picked up at terminal locations in Toronto was 1.9 percent lower last week, according to data published by Shell Canada. That price is down 11.7 percent from its 2014 high of C$0.9460 ($0.8686).
The percentage of those who think their finances were better off in the past year rose to 20.2, the highest since June 6, from 19.5 percent the week before. Those who say they are worse off was unchanged at 22.7 percent. At 2.5 percentage points, the difference between the two is the lowest since the week of March 7.
Even with last week’s rise, consumer confidence has stagnated this year amid mixed signals about the prospects for world’s 11th largest economy. Bank of Canada Governor Stephen Poloz cut his forecasts for economic expansion last month, predicting the country will take two years to return to full output, in part due to what he called “serial disappointment” with global growth.
That pessimism was reflected in a July 24 International Monetary Fund report that cut its growth projections amid growing concern that geopolitical risks, such as Middle East unrest, will rattle the world economy.
“The forward views on the expected strength of the Canadian economy still remain below the 2014 average,” said Nik Nanos, chairman of Nanos Research Group.
The Nanos index is derived from weekly polling based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points, 19 times out of 20.
The index has two sub-indexes. The Expectations Index, based on responses about the national economy and real estate, climbed to 57.4 from 57.3.
The percentage of those who expect the economy to strengthen over the next six months increased to 17.9 from 17.7 the previous week. The gauge has averaged 21.3 this year.
Those predicting higher real estate prices over the next six months rose to a 41.5 percent share from 41.4 percent. The 2014 average is 40.4.
The Pocketbook Index, based on responses about job security as well as personal finances, rose to 60.3 from 59.9 the previous week.
The proportion of people who describe their job as at least somewhat secure slipped to 65.7 percent from 65.8 percent. The 2014 average is 66.7 percent.
–With assistance from Theophilos Argitis in Ottawa.