OTTAWA — Canadians are becoming more pessimistic over the strength of the economic recovery and what it will mean for their finances and job security, a new consumer confidence survey shows.
The monthly Conference Board of Canada survey shows even as economists say they think the recession has ended, many Canadians are not so sure, with job worries a key concern.
Adding to those worries Thursday, two of Canada’s best-known companies, Montreal-based industrial giant Bombardier Inc. and cellphone and cable TV operator Rogers Communications, revealed they are cutting more than 1,600 jobs between them.
Those cuts come in the wake of widespread restructuring that has already cost thousands of jobs in the automotive and forestry industries, two key industrial sectors hit hard by the recession.
Consumer confidence normally bubbles during good times, but the November Conference Board survey of 2,000 people finds that confidence dropped 5.7 points to 79, well below the readings of about 100 observed before the recession struck a year ago.
The biggest worry is over job security. More than 400,000 workers have lost jobs in the past year, including 43,000 in October, the last month for which data is available.
The national jobless rate is now 8.6 per cent.
On the jobs front Thursday, Rogers (TSX:RCI.B) confirmed it will lay off three per cent of its workforce — about 900 people, mostly in management positions as the company copes with tougher competition, especially in its wireless business.
At Bombardier, (TSX:BBD.B), the Montreal aircraft maker and rail transit manufacturer is cutting 715 jobs at a Montreal area aircraft plant as the company reduces production of its CRJ regional jets.
The cuts are in addition to 4,360 layoffs previously announced this fiscal year for Bombardier’s worldwide operations.
The November survey found only 19.7 per cent of the respondents expected to find more jobs available over the next six months, down 3.2 points from October.
As well, 25 per cent said they believe fewer jobs will be on offer, up 1.2 points.
‘The outlook for future job creation remains a significant detractor to consumer confidence,” the Ottawa-based think-tank said.
‘This month’s results highlight just how fragile the perception of an economic recovery is at this time.”
Economists are divided on the importance of consumer confidence surveys as an accurate predictor of future economic performance, with some saying the results merely serve to reflect current sentiments.
But the Conference Board and some economists argue deteriorating confidence can cause individuals to hold off purchases, thereby depressing overall economic activity.
The latest survey does suggest that the euphoria over the end of the recession observed during the spring and summer months is giving way to a belief that true recovery, as many analysts have warned, may take years rather than months.
Gloom was spread throughout the country, with Ontario, British Columbia and Atlantic Canada registering declines in consumer confidence. B.C.’s decline was a whopping 13 points.
There were no corresponding bright spots. The other two regions — Quebec and the Prairies — registered no relevant change from the rather weak optimism of the previous month.
The survey also found more pessimism about personal finances.
Just 13.9 per cent of respondents answered positively about their current finances, down one point from October.
Asked if they thought their family’s finances would improve in the coming six months, only 27.1 per cent agreed, down 0.6 point.
And 25.6 per cent described their finances as worse than six months ago.
Not surprisingly, Canadians views on whether this was a good time for a major purchase deteriorated somewhat, not a good sign for retailers during the year’s busiest shopping season.