Canadians’ consumer confidence rose slightly for the second consecutive week last week, largely on the one-week gains in real estate, but doesn’t yet reflect Monday’s massive stock market slide.
The confidence index, which is compiled via a partnership between Bloomberg News and Nanos Research Group, rose to 53.20 for the week ending August 21, from to 52.32 the week prior. However, the one-year average stands at 60.01.
The real estate confidence index was up 2.40 points from the week-ago period, at 34.13. Job security also posted decent gains, rising to 67.59 from 66.27 the week prior.
“Of note there was a noticeable one week gain in terms of the perceptions of real estate,” said Nanos Research Group chairman, Nik Nanos. “This will have to be monitored to see if this is a potential new trend.”
Home sales in Canada were up 3.4 per cent year-over-year for the month of July. Average prices, meanwhile, rose to $437,699 in July, up 8.9 per cent from the year-ago period.
However, the strong real estate market isn’t likely to trump the other concerns about the market. Monday’s market drop-off has yet to be reflected in the consumer confidence rating, while the low dollar and crude benchmark price are also expected to impact this week’s index.
“Across-the-board increases in expectations over the past few weeks suggest that households have already priced in their concerns about the energy sector’s impact on the Canadian economy,” said Robert Lawrie and Peter Savvin of Bloomberg Economics. “However, recent sharp drops in stock prices could bring attention to worries about a global economic slowdown.”
Consumer confidence rose for the second consecutive week on strong real estate gains, but that hasn’t yet accounted for steep market drop-offs early this week.