Notes slowing global economic growth
The Bank of Canada increased the target for its trend-setting overnight lending rate on July 20, 2010, raising it by a quarter of a percentage point to 0.75 per cent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one per cent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S., and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is evolving largely as expected in recent months, but trimmed its forecast for economic growth this year and next by 0.2 per cent to 3.5 per cent in 2010 and 2.9 per cent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 per cent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicated, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures was pulled forward into the first half of 2010, causing to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates “that business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20th, the advertised five-year conventional mortgage rate of 5.79 per cent was down 0.06 per cent from one year earlier, and 0.2 per cent below where it stood when Bank made its previous interest rate announcement on June 1, 2010. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options wide open as to whether it will raise interest rates further when it makes its next rate announcement on September 8th.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” said CREA Chief Economist Gregory Klump. “The strength of recent economic indicators have prompted the Bank to raise interest rates, but the Bank has signaled that may keep rates on hold should the economic recovery begin to show signs of loosing steam.”
The Bank’s July MPR will be published on July 22. The Bank will make its next scheduled rate announcement on September 8th.
http://creastats.crea.ca/natl/interest_rate_trends.htm
(CREA 07/20/2010)
As was widely expected, the Bank of Canada held its benchmark overnight lending rate steady at 0.25 per cent at its setting on March 2, 2010. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent.
The Bank acknowledged that economic growth and inflation have recently picked up by more than it previously expected. In its most recent Monetary Policy Report published in January 2010, the Bank predicted that the Canadian economy would grow by 3.3 per cent and that core inflation would be running at 1.6 per cent in the fourth quarter of 2009. In actuality, the Canadian economy expanded by five per cent on an annualized basis, and the core rate of inflation hit two per cent year-over-year in December 2009.
The Bank recognized that the “ongoing global economic recovery is being driven largely by strong domestic demand growth in many emerging-market economies and supported in advanced economies by exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”
However, financial markets will focus attention on the change in language compared to the Bank’s recession-era announcements. In its March 2nd announcement, the Bank indicated that “the main macroeconomic risks to the inflation projection are roughly balanced.” This marks the first time in over a year in which it judges that the risks to inflation were tilted to the downside.
The Bank also restated its commitment to keep its trend-setting overnight lending rate on hold until the second half of 2010, conditional on the outlook for inflation.
“Financial markets, however, will look past the Bank’s conditional commitment and increase bets that the Bank will move to raise rates before then,” said CREA’s Chief Economist Gregory Klump. “This will result in upward pressure on the Canada-U.S. currency exchange rate, thereby making the Bank’s assertion ‘that the persistent strength of the Canadian dollar and the low absolute level of U.S. demand [will] continue to act as significant drags on economic activity in Canada’ something of a self-fulfilling prophecy.”
“Interest rates will rise, but increases will be small and spread out over time. The Bank expects economic growth to rely on domestic demand once temporary government stimulus spending measures expire. Raising interest rates too soon and by too much runs the risk of choking economic growth,” added Mr. Klump.
As of March 2nd, the advertised five-year conventional mortgage rate stood at 5.39 per cent. This is down 0.4 per cent from one year earlier, and stands 0.1 per cent below where it stood when the Bank made its previous interest rate announcement on January 19, 2010.
Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of about one percentage point can be negotiated, depending on lender-client relationship.
http://creastats.crea.ca/natl/interest_rate_trends.htm
OTTAWA – February 8, 2010 – The Canadian Real Estate Association has revised its forecast for home sales via the MLS® Systems of Canadian real estate boards in 2010, and extended the forecast to 2011.
With Canadian economic growth rebounding from the recession, the unusually severe decline in sales activity in early 2009 is not expected to recur in 2010. Annual activity in 2010 is forecast to be well above the previous year’s level as a result.
CREA forecasts national activity will reach 527,300 units in 2010, up 13.3 per cent from 2009. This would represent a new annual record, standing 1.2 per cent above the previous peak in 2007. Low interest rates are expected to boost housing demand in the first half of the year, resulting in strong annual sales growth in nearly all provinces in 2010, led by British Columbia and Ontario.
National home sales activity is expected to remain strong in the first half of 2010, fuelled by low interest rates and homebuyers motivated to avoid the HST before it comes into effect in Ontario and British Columbia. Over the second half of the year, national activity is expected to trend downward as the last of pent-up demand is exhausted, interest rates begin rising, and the HST comes into effect in Ontario and British Columbia.
Interest rate increases will contribute to weaker national sales activity in 2011. National home sales activity is forecast to decline 7.1 per cent to 490,100 units in 2011, putting it on par with annual levels reported in 2005 and 2006.
“Although interest rates are expected to rise, they will still be low enough to keep affordability within reach for many homebuyers requiring mortgage financing, and support overall housing demand,” said CREA President Dale Ripplinger.
The national average home price is forecast to climb 5.4 per cent in 2010, reaching a record $337,500, with average price gains forecast in all provinces. The national average price increase will continue to reflect upward skewing from the rebound in activity among Canada’s priciest markets, particularly in British Columbia and Ontario.
The national average price is forecast to ease by 1.5 per cent in 2011. Modest average price gains are forecast for all provinces except British Columbia and Ontario, whose share of national activity is expected to ease. The shift in the contribution made by provinces toward national activity will continue skewing the annual comparison in the national average price in 2011.
The price trend is similar but less dramatic for the weighted national average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national average price is forecast to climb 4.8 per cent in 2010, and remain stable in 2011.
“Improved financial market stability and recovering global economic growth mean that home sales activity in 2010 is unlikely to repeat the dive it experienced in late 2008 and early 2009,” said Chief Economist Gregory Klump.
“Fiscal restraint, a strong Canadian dollar and a subdued inflation outlook point to marginal interest rate increases over the next couple of years, especially if the U.S. economic recovery proves to be weak and protracted,” said Klump.
“The Bank of Canada will need time to gauge the effect of interest rate increases on Canadian economic growth,” Klump said. “It recognizes that consumer debt burdens are running high, so it will want to gauge the impact of interest rate hikes on domestic demand and overall economic growth. Changes in interest rates impact the economy with a lag, so the timing and magnitude of interest rate hikes will be tricky, given that the Bank expects the private sector to lead economic growth once temporary government stimulus spending expires,” he added.
“The decline and subsequent rebound in sales activity for homes in the upper price spectrum in some of Canada’s priciest markets skewed average prices upward in the second half of 2009 and into 2010. This segment of housing activity in Ontario and British Columbia is expected to ease beginning in the second half of 2010, causing average prices to moderate in those provinces,” said Klump.
“A downward trend in national sales activity combined with an increase in listings will result in a more balanced market. Although builders are understandably more upbeat than they were during the depth of the recession, speculative building will likely continue to be held in check. As a result, while the real estate market will become more balanced, Canada will continue to avoid the massive realignment in housing supply and demand experienced in the U.S.”
CREA Residential Market Forecast:
| Residential unit sales forecast | 2009 | 2009 Annual percentage change | 2010 Forecast | 2010 Annual percentage change | 2011 Forecast | 2011 Annual percentage change |
| Canada | 465,251 | 7.7 | 527,300 | 13.3 | 490,100 | -7.1 |
| British Columbia | 85,028 | 23.4 | 101,900 | 19.8 | 88,800 | -12.9 |
| Alberta | 57,786 | 2.5 | 63,050 | 9.1 | 64,000 | 1.5 |
| Saskatchewan | 10,856 | 6.5 | 10,900 | 0.4 | 11,050 | 1.4 |
| Manitoba | 13,086 | -3.2 | 14,050 | 7.4 | 14,350 | 2.1 |
| Ontario | 195,840 | 8.2 | 223,700 | 14.2 | 200,300 | -10.5 |
| Quebec | 79,290 | 3.3 | 87,950 | 10.9 | 85,450 | -2.8 |
| New Brunswick | 7,003 | -7.3 | 7,550 | 7.8 | 7,700 | 2.0 |
| Nova Scotia | 10,021 | -7.8 | 11,400 | 13.8 | 11,500 | 0.9 |
| Prince Edward Island | 1,404 | -0.6 | 1,450 | 3.3 | 1,450 | 0.0 |
| Newfoundland | 4,416 | -5.9 | 4,900 | 11.0 | 5,050 | 3.1 |
| Residential average price forecast | 2009 | 2009 Annual percentage change | 2010 Forecast | 2010 Annual percentage change | 2011 Forecast | 2011 Annual percentage change |
| Canada | 320,333 | 5.0 | 337,500 | 5.4 | 332,400 | -1.5 |
| British Columbia | 465,725 | 2.4 | 485,500 | 4.2 | 476,600 | -1.8 |
| Alberta | 341,201 | -3.3 | 357,300 | 4.7 | 361,700 | 1.2 |
| Saskatchewan | 233,695 | 4.1 | 242,500 | 3.8 | 248,500 | 2.5 |
| Manitoba | 201,343 | 5.8 | 210,300 | 4.4 | 215,300 | 2.4 |
| Ontario | 318,366 | 5.3 | 332,700 | 4.5 | 326,000 | -2.0 |
| Quebec | 225,412 | 4.7 | 240,500 | 6.7 | 249,100 | 3.6 |
| New Brunswick | 154,906 | 6.3 | 159,400 | 2.9 | 164,200 | 3.0 |
| Nova Scotia | 196,690 | 3.6 | 200,900 | 2.1 | 204,700 | 1.9 |
| Prince Edward Island | 146,044 | 4.4 | 149,900 | 2.6 | 153,200 | 2.2 |
| Newfoundland | 206,374 | 15.6 | 222,300 | 7.7 | 238,900 | 7.5 |
NOTE: All statistics contained in this release are obtained through analysis of the MLS® Systems of real estate Boards across Canada.
MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 98,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.
Registrants in any province who become members of organized real estate have an obligation to act in accordance with the REALTOR® Code. This Code outlines the accepted standard of conduct for all real estate practitioners who are members of a real estate Board or a Provincial Association.
CREA owns the MLS® and REALTOR® trademarks, which signify a high standard of service and identify members of CREA.
For further information, please contact:
Spencer Callaghan, Communications Officer
The Canadian Real Estate Association
P: 613-237-7111 or 613-884-1460
E: scallaghan@crea.ca
To view the complete release visit: http://www.crea.ca/public/news_stats/pdfs/nationalresidentialforecast2010.pdf
Reiterates commitment to hold until end of second quarter of 2010
As was widely expected, the Bank of Canada held its benchmark overnight lending rate steady at 0.25 per cent at its setting on January 19th, 2010. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent.
With the economic recovery under way, the Bank acknowledged that the outlook for global growth was “somewhat stronger” than it had predicted in October, but stressed that this was still very much dependent on “exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.” The Bank did, however, remove its comment regarding “significant fragilities” in the global economy, which had featured prominently in the previous two announcements.
Economic growth in Canada turned positive in the third quarter, and is expected to have improved further in the fourth quarter, accompanied by an increase in total CPI inflation, and higher than expected core rate of inflation.
The Bank said it believes that the Canadian economy will have contracted 2.5 per cent 2009, though annual data is not yet finalized. The Bank had originally predicted a 2.4 per cent decline. The Bank also made some small changes to its forecast for this year and next. The Bank now sees economic growth of 2.9 per cent in 2010, down slightly from the 3.0 per cent projection in October.
For 2011, the forecast was upgraded to 3.5 per cent from 3.3 per cent last fall. The Bank said “the private sector should become the sole driver of domestic demand in 2011,” which is when government stimulus is set to expire.
The Bank named a number of factors supporting Canada’s economic recovery – policy support, increased confidence, improving financial conditions, global growth, and higher terms of trade. The Bank reiterated that the strong Canadian dollar and weak U.S. demand were the main drags on the Canadian economy. As a result, growth continues to be driven more by the domestic side and less by exports.
The Bank said that the profile for the recovery in Canada was still consistent with its October Monetary Policy Report, saying inflation would return to the 2 per cent target in the third quarter of 2011. Conditional on this outlook, the overnight rate can be expected to remain at its current level until the end of the second quarter of 2010.
The Bank noted that the risks to the inflation outlook remain unchanged from those outlined in the October Monetary Policy Report. Inflation could climb faster if global and domestic demand ends up being stronger than currently expected. By contrast, inflationary pressures would be held in check by a more protracted global recovery and persistent strength in the Canadian dollar.
While the Bank said it judged these risks to be roughly balanced, it noted that, since it cannot lower rates any further, the overall risk to the projection are tilted slightly to the downside.
“The Bank of Canada’s decision to leave rates on hold, until at least the second half of 2010, confirms the view that it’s still to early to even consider tapping the brakes on economic growth,” said CREA’s Chief Economist Gregory Klump. “While interest rates will eventually rise, the increases are likely to be small. The Bank recognizes that economic growth will rely on domestic demand once temporary government spending measures aimed at propping up economic growth expire. Raising interest rates too soon and by too much runs the risk of choking economic growth.”
As of January 19th, the advertised five-year conventional mortgage rate stood at 5.49 per cent. This is down 1.26 per cent from one year earlier, and stands 0.1 per cent below where it stood when the Bank made its previous interest rate announcement on December 8th.
Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of up to a percentage point can be negotiated, depending on lender-client relationship.
http://creastats.crea.ca/natl/interest_rate_trends.htm
(CREA 01/19/2010)
National consumer confidence ended the year 2009 on a stronger footing compared to pre-recession levels, despite having edged down slightly the fourth quarter compared to the third quarter. According to the Conference Board of Canada’s index of consumer confidence, confidence eased slightly in the fourth quarter for the first time in three quarterly periods. The decrease in confidence reflects weakening sentiment about making major purchases.
The balance of sentiment about making major purchases, such as a home or a car, dipped slightly into negative territory in the fourth quarter. It had turned positive in the third quarter for the first time since the first quarter of 2008.
A negative balance of sentiment means more survey respondents said it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This indicator is an important factor underlying the housing market.
The balance of sentiment about job growth prospects continued improving in the fourth quarter of 2008, staying positive for the second consecutive quarter. More survey respondents expect employment to pick up over the next six months, and fewer expect more layoffs.
The balance of sentiment about households’ budgetary outlook softened marginally in the fourth quarter, but remains upbeat. A positive balance of opinion means more households said they expect their household budget to improve in the next six months than said they think it will worsen.
Consumer confidence in British Columbia eased slightly in the fourth quarter of 2009, according to the Conference Board of Canada’s index of consumer confidence. Moderating confidence in the fourth quarter reflects softening sentiment about households’ budgetary outlooks, job prospects, and major purchases.
The balance of sentiment about making a major purchase, such as a home or a car, fell sharply and again turned negative in the fourth quarter. It had turned positive in the third quarter for the first time in two years.
A negative balance of opinion means more survey respondents said that it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This indicator is an important factor underlying the housing market.
Sentiment about job growth prospects deteriorated in the fourth quarter. Although the balance of sentiment about near term job growth remained negative for the seventh consecutive quarter, it remained significantly less negative compared to where it stood at the height of the economic recession.
The balance of sentiment about households’ budgetary outlook stayed upbeat for the third consecutive quarter.
Consumer sentiment in the Prairie region improved for the third consecutive quarter in the fourth quarter of 2009, returning to the pre-recession level recorded in the second quarter of 2008.
Sentiment about making major purchases, such as a home or a car, improved for the fourth consecutive quarter. The balance of sentiment about making major purchases has stayed positive for two consecutive quarters, returning to levels on par with the third quarter of 2007.
A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
Sentiment about job growth prospects continued improving, building on significant increases recorded in the previous two quarters. The balance of opinion about job growth has stayed positive for three consecutive quarters, and is also back on par with pre-recession levels.
The balance of sentiment about the outlook for household budgets edged down only marginally in the fourth quarter on 2009 compared to the previous quarter.
Consumer confidence in Ontario dipped slightly in the fourth quarter of 2009 after having risen in each of the three previous quarters, according to the Conference Board of Canada’s index of consumer confidence. The slight decline in confidence reflects weakened sentiment about households’ budgetary outlooks and about making major purchases.
The balance of sentiment about making major purchases, such as a home or a car, turned negative in the fourth quarter. In the third quarter, it had turned positive for the first time since the fourth quarter of 2007.
A negative balance of opinion means more households said it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This is an important factor underlying the housing market.
The balance of sentiment about job growth prospects improved compared to the previous quarter, turning positive for the first time since the second quarter of 2006.
The balance of sentiment about the outlook for household budgets stayed positive for the third consecutive quarter in the fourth quarter of 2009, despite having softened slightly.
Consumer confidence in Quebec eased in the fourth quarter of 2009 but remains well above levels recorded at the height of the economic recession, according to the Conference Board of Canada’s index of consumer confidence. The decrease in confidence reflects weaker sentiment about household budgets and about making major purchases.
Despite having softened compared to the previous quarter, the balance of sentiment about making major purchases, such as a home or a car, remained positive in the fourth quarter. This represents the third consecutive quarter in which the balance of sentiment about making major purchases stayed positive.
A positive balance of opinion means more households said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
The balance of sentiment about job growth prospects turned positive for the first time since the beginning of 2008.
The balance of sentiment about the outlook for household budgets for the next six months eased in the fourth quarter, but nevertheless remained positive.
Consumer sentiment improved significantly in the fourth quarter of 2009, continuing its rise above pre-recession levels according to the Conference Board of Canada’s index of consumer confidence for the region. This marked the fourth consecutive increase in confidence.
Sentiment about making major purchases, such as a home or a car, held steady. The balance of sentiment about big-ticket purchases remained positive for the second consecutive quarter.
A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
After improving for a fourth consecutive quarter, the balance of sentiment about job growth became positive in the fourth quarter of 2009. This is its first positive reading since the second quarter of 2008.
The balance of sentiment about the outlook for household budgets over the next six months also improved in the fourth quarter. This marks the fourth consecutive quarter in which the balance of sentiment about the outlook for household budgets stayed upbeat.
Source: The Canadian Real Estate Association
National consumer confidence ended the year 2009 on a stronger footing compared to pre-recession levels, despite having edged down slightly the fourth quarter compared to the third quarter. According to the Conference Board of Canada’s index of consumer confidence, confidence eased slightly in the fourth quarter for the first time in three quarterly periods. The decrease in confidence reflects weakening sentiment about making major purchases.
The balance of sentiment about making major purchases, such as a home or a car, dipped slightly into negative territory in the fourth quarter. It had turned positive in the third quarter for the first time since the first quarter of 2008.
A negative balance of sentiment means more survey respondents said it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This indicator is an important factor underlying the housing market.
The balance of sentiment about job growth prospects continued improving in the fourth quarter of 2008, staying positive for the second consecutive quarter. More survey respondents expect employment to pick up over the next six months, and fewer expect more layoffs.
The balance of sentiment about households’ budgetary outlook softened marginally in the fourth quarter, but remains upbeat. A positive balance of opinion means more households said they expect their household budget to improve in the next six months than said they think it will worsen.
British Columbia
Consumer confidence in British Columbia eased slightly in the fourth quarter of 2009, according to the Conference Board of Canada’s index of consumer confidence. Moderating confidence in the fourth quarter reflects softening sentiment about households’ budgetary outlooks, job prospects, and major purchases.
The balance of sentiment about making a major purchase, such as a home or a car, fell sharply and again turned negative in the fourth quarter. It had turned positive in the third quarter for the first time in two years.
A negative balance of opinion means more survey respondents said that it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This indicator is an important factor underlying the housing market.
Sentiment about job growth prospects deteriorated in the fourth quarter. Although the balance of sentiment about near term job growth remained negative for the seventh consecutive quarter, it remained significantly less negative compared to where it stood at the height of the economic recession.
The balance of sentiment about households’ budgetary outlook stayed upbeat for the third consecutive quarter.
Prairie region
Consumer sentiment in the Prairie region improved for the third consecutive quarter in the fourth quarter of 2009, returning to the pre-recession level recorded in the second quarter of 2008.
Sentiment about making major purchases, such as a home or a car, improved for the fourth consecutive quarter. The balance of sentiment about making major purchases has stayed positive for two consecutive quarters, returning to levels on par with the third quarter of 2007.
A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
Sentiment about job growth prospects continued improving, building on significant increases recorded in the previous two quarters. The balance of opinion about job growth has stayed positive for three consecutive quarters, and is also back on par with pre-recession levels.
The balance of sentiment about the outlook for household budgets edged down only marginally in the fourth quarter on 2009 compared to the previous quarter.
Ontario
Consumer confidence in Ontario dipped slightly in the fourth quarter of 2009 after having risen in each of the three previous quarters, according to the Conference Board of Canada’s index of consumer confidence. The slight decline in confidence reflects weakened sentiment about households’ budgetary outlooks and about making major purchases.
The balance of sentiment about making major purchases, such as a home or a car, turned negative in the fourth quarter. In the third quarter, it had turned positive for the first time since the fourth quarter of 2007.
A negative balance of opinion means more households said it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This is an important factor underlying the housing market.
The balance of sentiment about job growth prospects improved compared to the previous quarter, turning positive for the first time since the second quarter of 2006.
The balance of sentiment about the outlook for household budgets stayed positive for the third consecutive quarter in the fourth quarter of 2009, despite having softened slightly.
Quebec
Consumer confidence in Quebec eased in the fourth quarter of 2009 but remains well above levels recorded at the height of the economic recession, according to the Conference Board of Canada’s index of consumer confidence. The decrease in confidence reflects weaker sentiment about household budgets and about making major purchases.
Despite having softened compared to the previous quarter, the balance of sentiment about making major purchases, such as a home or a car, remained positive in the fourth quarter. This represents the third consecutive quarter in which the balance of sentiment about making major purchases stayed positive.
A positive balance of opinion means more households said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
The balance of sentiment about job growth prospects turned positive for the first time since the beginning of 2008.
The balance of sentiment about the outlook for household budgets for the next six months eased in the fourth quarter, but nevertheless remained positive.
Atlantic region
Consumer sentiment improved significantly in the fourth quarter of 2009, continuing its rise above pre-recession levels according to the Conference Board of Canada’s index of consumer confidence for the region. This marked the fourth consecutive increase in confidence.
Sentiment about making major purchases, such as a home or a car, held steady. The balance of sentiment about big-ticket purchases remained positive for the second consecutive quarter.
A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.
After improving for a fourth consecutive quarter, the balance of sentiment about job growth became positive in the fourth quarter of 2009. This is its first positive reading since the second quarter of 2008.
The balance of sentiment about the outlook for household budgets over the next six months also improved in the fourth quarter. This marks the fourth consecutive quarter in which the balance of sentiment about the outlook for household budgets stayed upbeat.
(CREA 11/22/09)
