Economic Confidence is High, but Dark Clouds are on the Horizon Despite Confidence in Personal Finances Being Higher Than Ever

Only 8% of British Columbians think the Canadian economy will improve next year.

Vancouver, BC – In our latest economic confidence poll looking at the consumer’s outlook on the Canadian economy for 2019, 64% of BC residents describe the economic conditions in Canada as “very good” (6%) or “good” (58%), which is the highest rating in all of Canada other than in Quebec. Only 31% rate the economy as “poor” (28%) or “very poor” (15%). Confidence in the West is similar to the levels found in our previous Insights West poll on the same subject conducted in April of 2017.

Canadians as a whole are far less optimistic than residents in BC, with 55% rating the economy as “very good” (5%) or “good” (50%), and 43% rating conditions as “poor” (28%) or “very poor” (15%), leaving just 2% who are “not sure”. Overall confidence levels in our country are similar to the levels found two years ago, and Albertans are the least optimistic, with scores at half the level (27% good/very good), while Ontario ranks just behind BC (59%).

British Columbia residents are even more optimistic about their personal finances relative to the health of the economy as a whole—with 71% describing their personal financial situation as “good” (60%) or “very good” (11%), a level which is slightly higher than the national average at 67%, and the highest since we began tracking in 2014. Conversely, pessimism in BC is limited to 26% who rate their financial situation as “poor” (26%) or “very poor” (6%). Once again, optimism in BC is highest of the country relative to Canada’s other regions.

Optimism about personal finances does vary as expected, based on age and income. Those over 55 are most likely to be optimistic about their personal finances (74%) compared to those 35-54 (61%) and 34 or under (64%). Furthermore, those making over $75K per year are much more optimistic (78%) than those making under $75K per year (55%).

Expectations have lowered dramatically for the Canadian economy in 2019. A significantly large number of Canadians (43%) think the economy will decline – five times the number who think the economy will improve (8%), while nearly half (45%) expect it to remain the same. These numbers are a radical departure from our last wave in 2017, where 15% anticipated improvement, 51% expected the same, and only 27% thought it would decline.

Once again, British Columbia is the least pessimistic province, with only 33% thinking the economy will decline (52% think it will stay the same, 8% believe it will improve).

Three-in-five Canadians (60%) expect their household’s finances to stay the same over the next six months, while one-in-five (20%) are anticipating them to improve and 17% are expecting a decline. No major differences exist between the regions on this measure.

Career confidence and the jobs economy looks to remain relatively stable in 2019. Only 11% of British Columbians believe they are likely to be promoted within the next six months (same as 2017), but a much larger number (28%) consider themselves likely to receive a raise within the same time frame (slightly higher than 25% in 2017). British Columbians are feeling stable with their lifestyles, only 15% believe they are likely to change career paths in the coming months (compared to 21% in 2017) while 16% are considering moving to a different house (18% in 2017). Results across Canada do not vary widely from British Columbia.

Economic confidence in the future doesn’t seem to have had an impact on overall category spending, as British Columbian’s are just as likely to go on a holiday (55%), dine out (58%), spend on entertainment (60%), or purchase new clothing (51%) as they were back in 2017.

There also doesn’t seem to be a radical shift in the proportion of BC residents who are planning major expenditures in 2019 vs. 2017. Very few are likely to buy a new home (8%, -1%), buy a new vehicle (11%), undertake a major home renovation (15%, -2%), or go on a major overseas holiday (33%, +4%).

Despite the gloomy economic outlook for 2019, BC residents are somewhat less concerned than they were two years ago about financial matters relating to money, credit and debt, as there are more decreases in overall concerns than increases. The only exceptions are that 67% (+4%) of British Columbians say they are worried about the value of their investments, or about their employer running into financial trouble (31%, +6%) or being able to pay their mortgage or rent (37%, +3%). Smaller proportions have been concerned about having to carry a balance on a credit card (46%, -1%), the safety of their savings (62%, -2%), unemployment affecting their household (48%, -1%), or being able to pay their bills (54% -3%).

“Despite gloominess on the horizon in terms of overall economic confidence, British Columbians are very optimistic about their personal financial situation,” says Steve Mossop, President of Insights West. “Because of that, the level of personal expenditures on household items and major ticket items looks positive, and thus the economy in BC should be able to weather any perceived economic downturn”.

Although actual inflation rates are low, there is a perception that prices will increase. Almost nine-in-ten (86%) British Columbians are expecting to pay more for a week’s worth of groceries in the coming six months. Nearly half (46%) are also expecting to pay more for a new car, and 38% are envisioning higher prices for real estate, while 25% of expect to pay more for a new TV. Real estate is the notable category that has declined relative to 2017—where back then 52% thought the prices would continue to go up. This year, 28% think prices will stay the same, and 28% believe prices will go down (16% in 2017).

 

About Insights West:

Insights West is a progressive, Western-based, full-service marketing research company. It exists to serve the market with insights-driven research solutions and interpretive analysis through leading-edge tools, normative databases, and senior-level expertise across a broad range of public and private sector organizations. Insights West is based in Vancouver and Calgary.

About this Release:

Results are based on an online study conducted from January 19th to 22nd 2019, among a representative sample of 1,339 Canadian adults (with a sample boost of 519 British Columbians). The data has been statistically weighted according to Canadian census figures for age, gender and region. The margin of error—which measures sample variability—is +/- 2.7 percentage points, 19 times out of 20 for Canada (and +/- 4.3 percentage points, 19 times out of 20, for British Columbia). Discrepancies between totals are due to rounding. Click here to view the detailed data tabulations.

For further information, please contact:

Steve Mossop
President, Insights West
778-379-1140

stevemossop@insightswest.com