Valentine’s Day Feel Good Extends into Confidence About Economy In February: Survey

TNS Canada’s Monthly Consumer Confidence Index showed...

It looks like Canadians’ are feeling good about more than Valentine’s Day this year, as TNS Canada’s Monthly Consumer Confidence Index showed another significant gain of 1.3 points in February, nudging up to 99.7 from 98.4 in January.

Canadians’ continue to feel better about their present economic situation, as well as their economic prospects for the next six months. Only the Buy Index, which measures consumers’ intent to purchase “big ticket items” showed another decline in February.

“Consumers have now said for the last two months that they think things are improving” said Norman Baillie-David, Vice President of TNS Canada and Director of the Marketing and Social Research firm’s monthly tracking study.

“Whereas in January we hedged saying that Canadians haven’t been able to decide whether or not things are looking good – this second month in a row is beginning to (hopefully) point to an upward trend. The last six months have seen a bumpy ride as confidence has gone up and down, but with February‘s increase, it looks like we’re at close to post-recession highs. One more month with these gains and we’ll be officially out of the hole from a confidence standpoint.”

The Present Situation Index, which captures evaluations of the overall state of the current economic and employment situation, has also risen for the second consecutive month after a marked drop in December.

After falling 4.5 points to end 2010 at 89.0, the index rebounded 3.6 points in January, and another 1.9 points in February, to reach 94.5 points – a number reached only once since November 2008.

The Expectations Index, which measures consumers’ outlook for the economy, household income and employment in the next six months, continued its upward trend after seeing a 1.7 point increase from January to 109.5 points in February - the highest the index has been since April 2010; and another reason to be hopeful that the confidence is here to stay.

The Buy Index, which gauges the degree to which people think the current period is a good time to make major purchases, remained the same in February at 96.7 points after we saw a slight decrease of 0.3 points to open 2011, reinforcing our view that while Canadians are starting to feel pretty good about things again, they’re heeding the calls for caution with regard to using debt to finance these purchases.

“It’s like we feel good about keeping a tighter grip on our wallets”, Mr. Baillie-David reiterated.

Consumer Confidence Index tracks Canadians’ attitudes about the economy each month and is part of a global study conducted by TNS in 18 countries. Three indices are produced each month to show how confidence in the economy is changing: Present Situation Index; an Expectations Index; and a Buy Index.

The Canadian fieldwork is conducted using the firm’s national bi-weekly telephone omnibus service, TNS Express Telephone.

A total of 1,015 nationally representative Canadian adults were interviewed between February 7 and 11, 2011. For a survey sample of this size, the margin of sampling error is plus or minus 3.1 percentage points, 19 times out of 20.