Canadian consumers cautious
Canadians expect both their spending and income growth to be lower over the next 12 months than they did before the pandemic
By ATB Economics 8 July 2020 1 min read
Conducted from May 11 to June 1, 2020, the Bank of Canada’s Canadian Survey of Consumer Expectations (CSCE) finds that Canadians expect both their spending and income growth to be lower over the next 12 months than they did before the pandemic.
As of the second quarter of 2020, the median amount by which Canadians estimated their spending will increase over the next 12 months was 2.24 per cent. It was 3.78 per cent the previous quarter.
The estimate has only been lower on one occasion since the CSCE started six years ago when it dipped to 2.18 during the final quarter of 2017.
“Households expect to concentrate their spending on essential goods and services and to reduce spending on durables (cars, home appliances, furniture) and activities involving person-to-person contact (restaurants, cinema, travel and transportation) until the situation normalizes.”
Expectations regarding household income growth have also soured. At 1.9 per cent, the median amount by which Canadians anticipate their household income to increase over the year ahead is the lowest on record since the inception of the CSCE. The increase in household spending was pegged at 2.36 per cent in the first quarter before the economic impact of COVID-19 was clear.
Only 13 per cent of consumers have not changed their shopping habits since the outbreak of COVID-19 whereas 39 per cent did more shopping online and 61 per cent shopped less frequently.
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