Canadians ride wave of optimism

Consumers in Canada enter the year riding a wave of optimism that the worst is over.

The country’s households reported a surge in confidence in the final weeks of 2020 that has brought sentiment back to pre-pandemic levels for the first time since the economy crashed last year, according to polling by Bloomberg News and Nanos Research Group.

It’s a remarkable recovery that highlights just how much Canadian households have emerged from the deep economic crisis largely intact — cushioned by massive income support payments, a strong rebound in jobs, surging home prices and stock market gains. That’s a positive signal for the overall economy, stoking expectations of a rush in consumer spending once restrictions are finally lifted.

“Canadians closed out 2020 with regained confidence,” Nik Nanos, chief data scientist at Nanos Research Group, said in a statement.

Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security and their outlook for both the economy and real estate prices.

The Bloomberg Nanos Canadian Confidence Index, a composite gauge based on a rolling four-week average of poll responses, rose for a fifth straight week and ended the year at 56, the highest since mid-february.

This comes despite a fresh wave of restrictions hitting some of the country’s largest provinces as authorities struggle to lower virus cases.

Not all families are better off. The data show Canadians with higher incomes report a stronger rebound in confidence than lower-income households. Among respondents with incomes of more than $75,000, confidence levels are at the highest in more than a year, well past pre-pandemic levels. People with incomes below that threshold have yet to see confidence levels fully rebound.