Economic Confidence Ending Year On A Robust Note

Toronto, ON- The latest Ipsos-Reid Economic Confidence Monitor, provided exclusively to the Report on Business section of the Globe and Mail and CTV, suggests that Canadians continue to be upbeat about the current economy and the year ahead. In fact, 81% of Canadians describe the current economy as good, up from 75% in August 2004. Since tracking began in July 1994, this is just the second time the proportion that view the current economy as good matches the record high set in January 2001 (other was March 2003). Moreover, 34% of Canadians think the national economy will "improve" over the next year or so (up from 25% in August) and another 50% think it will "stay the same."

The Canadian Economic Confidence Index developed by Ipsos-Reid has risen 2.86 points from 100.14 in August to 103.60 today. The index functions as a predictor for the Canadian economy. The index is based on six key factors that influence Canadians' expectations of whether the Canadian economy will improve, stay the same or get worse in the next year or so. Positive home purchasing intentions and low job anxiety continue to give the Canadian Economic Confidence Index a strong push, even more so than in August. At this time, One in seven (14%) Canadians say they are likely to purchase a new or another home right now. And, just 18% of Canadians are worried about either themselves or someone in their household losing their job.

Expectations that one's personal economic situation will improve has switched to a positive attribute of the index. Today, 39% of Canadians think their personal economic situation will "improve," while only 12% think it will "get worse."

Interest rate predictions remains by far the major negative factor, to an even greater extent than in August. Two-thirds (68%) of Canadians believe interest rates will "go up" in the next six months, while just 4% think rates will "go down."

Expectations about big-ticket spending in the next year and everyday purchase intentions continue to dampen economic confidence, as they have since August 2002. One-quarter (27%) of Canadians say they plan to spend more on big-ticket items such as a car, household appliances, or vacations the next year than they did last year, while the same proportion (29%) says they expect to spend less. One-third (32%) of Canadians says they expect to spend more on things such as groceries, clothing or other personal goods and services than last year, while 11% says they plan to spend less.

These are the findings of an Ipsos-Reid poll conducted from November 16th to November 18th, 2004. For the survey, a representative randomly selected sample of 1001 adult Canadians was interviewed by telephone. With a sample of this size, the results are considered accurate to within 177 3.1 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. These data were weighted to ensure the sample's regional and age/sex composition reflects that of the actual Canadian population according to the 2001 Census data.

Please open the attached PDF to view the complete release and detailed tables.

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For more information on this news release, please contact:

John Wright
Senior Vice-President
Ipsos-Reid Public Affairs
(416) 324-2900