Canada's Finance Minister Bill Morneau speaks to a reporter after delivering the budget on Parliament Hill in Ottawa March 22, 2016.PATRICK DOYLE/Reuters
Canadian consumer confidence reached a 2016 high after Finance Minister Bill Morneau delivered his budget, spurring hope for an economic turnaround.
The overall Bloomberg Nanos consumer confidence index rose to 54.5, from 53.8 a week earlier, the highest in three months and closing in on the 12-month average of 55. Mr. Morneau's fiscal blueprint outlined plans for $118.6-billion in cumulative deficits over the next six years to boost transfers to low- and middle-income homes and spend more on infrastructure.
Increasing national confidence was tempered by the lingering effects of the oil price shock. Sentiment about personal finances fell to an all-time low in the energy-producing Prairies, while reaching a three-year-low nationally.
"Households appear to be balancing their immediate pocketbook concerns – as the unemployment rate continues to trend higher – with the prospect of government investment that positions Canada for further growth, productivity gains, and relief from stagnant wages," Robert Lawrie of Bloomberg Economics said.
The share of respondents expecting the Canadian economy to gain strength rose to 23 per cent from 20.2 per cent, the most since December. Those expecting it to contract fell to 33.7 per cent, the lowest share this year.
Housing expectations also increased, with 36.8 per cent expecting home values in their neighbourhood to increase over the next six months, the most since July, 2015.
The so-called pocketbook subindex, measuring the past year of a respondent's finances and their current job security, fell in Alberta, Saskatchewan and Manitoba to a record low 49.8 from 53 a week earlier. Nationally, the index fell to 56.8 from 57.3 a week earlier, reaching its lowest level since May, 2013.
The percentage of respondents reporting their jobs are "not at all secure" rose to 8.1 – the highest level since August – from 7.5 a week earlier, and the share of those whose jobs are "somewhat not secure" rose to 5.9 from 5 a week earlier.
The figures show "fragility in the Canadian economy is starting to have an impact on Canadians personally," Nanos Research Group chairman Nik Nanos said.
The Bloomberg Nanos consumer confidence index is based on a four-week rolling average of 1,000 respondents to telephone polling. It's considered accurate within 3.1 percentage points, 19 times out of 20. The latest round of polling ended March 24.