The Bloomberg Nanos Canadian Confidence Index declined to 57.6 in the week ending October 27, the final reading of the month, versus 58.3 in September and 59.7 in August. The sub-index tied to perceptions about the economy and housing had the lowest month-end reading since January.
The deterioration reflects what’s happening in the economy. The pace of growth in Canada is returning to more normal levels after topping the Group of Seven in the first half. Additionally, the central bank raised interest rates twice since July, eating into the disposable income of some families, and a federal regulator introduced measures this month to tighten access to mortgage financing.
“More households are holding a negative outlook on the economy than a positive one,” Bloomberg economist Robert Lawrie said. “Considering the persistent slack in the labor market and the high level of household debt, the prospect of slower growth might seem more daunting for households with less savings.”
Read more: CMHC releases market outlook
The share of respondents who said local housing prices will decline in the next six months climbed to 15.4% last week, up from 14.5% a month earlier. Canada’s housing agency pared its sales and price forecasts last week for the next two years, saying five-year mortgage rates could rise by 1.6% over that period.
Pessimism about the overall economy increased for a third month. The 28.2% of respondents who said it would become weaker in the next six months was the highest month-end reading since January.
The Bloomberg Nanos Canadian Confidence Index is based on a four-week rolling average of 1,000 telephone respondents. The results are considered accurate within 3.1%, 19 times out of 20.
Canadian consumer confidence fell for a second month as the outlook for the economy and real estate prices soured, telephone polling showed.