RBC Canadian Consumer Outlook Index Rises as Fewer Shoppers Delaying Major Purchases; Job Anxiety Drops

Toronto, ON - The RBC Canadian Consumer Outlook index has been given a shot in the arm over the last month rising from its baseline of 100 points to 108 points, in part driven by consumers being less reluctant to delay their major purchases and a significant drop in job anxiety. The RBC CCO is a monthly national survey of consumers' attitudes on the current and future state of local and national economies, personal financial situations, savings and confidence to make large purchases and investments.

With November being the inaugural edition of the index, the baseline for the overall index and three sub-indices was set at 100. Reflecting a more positive assessment of the economy and optimism for the future, the overall index has risen to 108 points, driven primarily by the current conditions index which has risen to 117 points. The investments index rose to 109 points, while the expectations index increased slightly to 103 points.

Whereas last month nearly two in three (63%) Canadians indicated that they were delaying major purchases such as a car, appliances or vacation as a result of the current economic conditions, it appears that the Christmas spirit has instilled a greater sense of confidence in many consumers, as only 47% (down 16 points) now say that they will delay major purchases due to the economy. In fact, perhaps taking advantage of great deals and incentives, 5% intend to make major purchases sooner than they otherwise might have. In contrast, 48% of consumers say that their major purchasing decisions are unaffected (for the better or worse) by the current economy, up from 34% last month.

While Canadians are currently split on whether the state of the current economy is `good' (51%) or `bad' (49%), six in ten (60%) expect that the economy will improve over the next year compared to just two in ten (17%) who believe it will worsen.

Furthermore, while four in ten (39%) believe that their personal financial situation is worse than three months ago (on par with November results), Canadians are becoming more optimistic that their personal situation will improve over the next three months (30%, up 3 points) and the next year (43%, up 5 points).

In terms of what is causing fewer Canadians to scale back their spending and delay making major purchases, it's likely a function of the significant decrease in job anxiety witnessed across the country over the last month. Just two in ten (21%) Canadians say that they or someone in their family is worried about losing their job or being laid off, down from 27% in November, and roughly on par with where job anxiety stood at this time last year (22%).

The most pronounced decreases in job anxiety are witnessed in Atlantic Canada (10%, down 14 points), Alberta (28%, down 9 points) and Ontario (21%, down 8 points), while more modest decreases are evidenced in Saskatchewan and Manitoba (7%, down 5 points) and Quebec (21%, down 4 points). Only in British Columbia (29%) did job anxiety not decrease at all, making it the jurisdiction that has the highest percentage of Canadians who fear a job loss within their family.

Bank of Canada Governor Mark Carney has been giving Canadians stern warnings about taking on too much debt in these times of low interest rates, for fear of the debt becoming unmanageable in times of higher interest rates. To this effect, a majority (57%) of Canadians are expecting interest rates to rise in the next six months, compared to just 5% who believe rates will go down and 38% who think rates will remain unchanged.

Perhaps heeding Governor Carney's warnings, the data suggest that most Canadians are trying to avoid accumulating debt as a result of the holiday season, with three quarters (75%) indicating that they would finance most of their holiday spending using regular day-to-day chequing accounts (52%) or savings accounts (23%), while 2% will use their annual bonus. However, some indicated that they had the intention to use credit to finance their holiday spending: one in five (20%) would use their credit cards, and 3% would use their line of credit.

Four in ten (42%) Canadians expect to be shopping for post-holiday deals in January, with a majority (52%) of those aged 18 to 34 indicating that they'll be hunting for bargains in January.

These are some of the findings of the Ipsos Reid RBC Canadian Consumer Outlook poll conducted between December 8-11, 2009, on behalf of RBC. For this survey, a national sample of 1,076 adults from Ipsos' Canadian online panel was interviewed online. Weighting was then employed to balance demographics and ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/-3.1 percentage points 19 times out of 20 of what the results would have been had the entire population of adults in Canada been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

For more information on this news release, please contact:
John Wright
Senior Vice President
Ipsos Public Affairs
(416) 324-2002
[email protected]

About Ipsos Reid

Ipsos Reid is Canada's market intelligence leader, the country's leading provider of public opinion research, and research partner for loyalty and forecasting and modelling insights. With operations in eight cities, Ipsos Reid employs more than 600 research professionals and support staff in Canada. The company has the biggest network of telephone call centres in the country, as well as the largest pre-recruited household and online panels. Ipsos Reid's marketing research and public affairs practices offer the premier suite of research vehicles in Canada, all of which provide clients with actionable and relevant information. Staffed with seasoned research consultants with extensive industry-specific backgrounds, Ipsos Reid offers syndicated information or custom solutions across key sectors of the Canadian economy, including consumer packaged goods, financial services, automotive, retail, and technology & telecommunications. Ipsos Reid is an Ipsos company, a leading global survey-based market research group.

To learn more, please visit www.ipsos.ca .

About Ipsos

Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world.

Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe. Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2008, Ipsos generated global revenues of e979.3 million.

Visit www.ipsos.com to learn more about Ipsos offerings and capabilities.

Ipsos, listed on the Eurolist of Euronext - Comp B, is part of SBF 120 and the Mid-100 Index, adheres to the Next Prime segment and is eligible to the Deferred Settlement System. Isin FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP