Delivering the pulse of the nation to you

Transcription

1 Delivering the pulse of the nation to you A quarterly newsletter from TNS Canada AUTUMN 2011

2 l Indices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director

3 Indices Canadian Consumers Losing Faith in Economy The Consumer Confidence Index saw modest increases every month during the second quarter of 2011, however quarter three has produced the exact opposite results. This quarter, the Index has dropped in each successive month to a low this month of 96.4 points. Consumers seemed to be showing signs of hope for the economy throughout the first half of the year, but the troubles in Europe, combined with continuing political turmoil in the US as Congress could not agree on how to manage America s increasing debt load, all conspired to erase the tentative gains made during the first half of It is often said that Canada is not an island, and we are certainly seeing the effects of global economic developments on how Canadians feel about their own prospects. said Norman Baillie-David, Vice President of TNS Canada and director of the marketing and social research firm s monthly tracking study. Confidence continued to drop during Q3 even though the Canadian economy continued to perform rather well. We were reacting to the world situation rather than our own. The fear is that falling confidence will halt spending and that tends to be a self-fulfilling prophecy Consumer Confidence Index

4 Indices Canadian Consumers' Feelings Toward Current Economic Situation Turned Sour The Present Situation Index, which captures feelings toward the present-day economy and the employment situation, has completely changed direction from last quarter and has bottomed out to end quarter three down nearly four full points at This, after the Index showed great promise last quarter, eclipsing the point plateau for the first time since As evidenced by this Index, consumers are being affected by the world s economic uncertainty, and are no longer feeling good about their current economic and employment situation. 130 Present SituationIndex

5 Indices Gloomy Global Economic News Leaves Canadians Negative about Six-month Outlook The Expectations Index, which measures people s outlook for the economy six months from now, continued its freefall this quarter, dropping nearly ten points since May to end the quarter at This quarter marks the first time since 2009 the index dropped below the point threshold. Expectations Index While people feel good about the now, they re still not sure about the immediate future. continued Mr. Baillie-David. This is where we see the impact of the continued bad economic news taking its toll. While Canadians feel their own situation right now is OK, the constant stream of bad economic news continues to seed doubts about what s in store for the future

6 Indices Buying Intentions for Major Purchases Continues to Waver The Buy Index, which gauges the degree to which people think the current period is a good time to make major purchases, continued to see-saw this quarter finishing at 95.5 points. This shows that even though Canadians are not hurting themselves, they were not inclined to take any risks (such as buying that new big ticket item) as long as they see the continuing bad news on the economy, especially from south of the border. Canadians feel OK about their own situation, but are definitely keeping their ear to the ground and waiting for some good news, not only about our economy, but the US economy as well added Mr. Baillie-David. Canadians in the aggregate couldn t make up their mind whether or not it was a good time to make purchases Buy Index

7 Indices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director

8 U.S. Indices US Consumer Confidence Tumbles, Erases Memories of Encouraging Start to Year Much like the Canadian Index, the American Consumer Confidence Index has been hit hard by recent events. After holding steady in July, the Index plummeted 15 points in August and finished the quarter at In fact, although it looked like consumers were finally coming out of the doldrums during the first half of the year, all of these gains and more were wiped out in Q3, driven primarily by the US debt crisis in in July/August. Says Lynn Franco, Director of The Conference Board Consumer Research Center: The pessimism that shrouded consumers last month has spilled over into September. Consumer expectations, which had plummeted in August, posted a marginal gain. However, consumers expressed greater concern about their expected earnings, a sign thatt does not bode well for spending. In addition, consumers assessment of current conditions declined for the fifth consecutive month, a sign that the economic environment remains weak Consumer Confidence Index United States Note: The U.S. Consumer Confidence Index is produced by the Conference Board. The Conference Board is not responsible for the interpretation of the results provided herein. 8

9 U.S. Indices Americans Pessimism about Present Situation Continued in Q3 The Present Situation Index continues to be stuck in historic lows, and shows no signs of changing for the positive. After finishing the last quarter at 37.6, the Index has dipped further each month thereafter, and finished quarter three at 32.5 points. Evidently, American consumers perception of today s economy and employment situation is poor at best, and there seems to be no good news on the horizon. Present Situation Index 145 United States

10 U.S. Indices Americans Souring on Expectations for the Next Six Months The Expectations Index, which measures how Americans feel about their economic prospects six months from now, continued its decent throughout Q3. Since the index peaked at 95.1 points in February - the highest the index had been since 2006 the Index has dropped over 40 points and has crash landed at 54.0 to end the quarter. 140 Expectations Index United States The drop can also likelyl be attributed t to continued employment worries, and especially the US debt crisis and the potential impact it would have had on the economy had the US defaulted on its debt

11 Indices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director

12 Canadian Regional Consumer Confidence Indices Confidence Sees Biggest Drop in the West During the third quarter of 2011, the overall Consumer Confidence Index strayed from its marginal upward trend, with significant drops noted in all regions except for Quebec, where it had never showed the gains in the first half of the year seen in the other regions. The area hit hardest in terms of confidence is in the Prairies (Alberta and Manitoba/Saskatchewan). This region still remains above the national average, however the gap has tightened between the Prairies and the rest of Canada. Confidence on both coasts (BC and Atlantic Canada) continues to be below the national average. Quebec was the only area which held steady this quarter. Western Canada Consumer Confidence Index Atlantic Canada Consumer Confidence Index Alberta British Columbia Manitoba/Saskatchewan Central Canada Consumer Confidence Index Atlantic 12 Monthly value is average for three previous months 70 Ontario Quebec

13 Canadian Regional Consumer Confidence Indices The Prairies 'Confidence in Present Situation Also Turning South Similar to the Consumer Confidence Index, the Present Situation Index saw decreases across the board, with the exception of Quebec, which held steady, but at below average levels. Again, the Prairies reversed their fortunes to the greatest degree. Interestingly, British Columbia held steady, but confidence is still considerably the lowest in the West, indicating that confidence is driven specifically by oil prices, and not necessarily how the broad resource base (commodities) are performing. Consumers feelings about the here and now in Atlantic Canada and Ontario continue to be lower than the average. 150 Western Canada Atlantic Canada Present Situation Index 130 Present Situation Index Alberta British Columbia Manitoba/Saskatchewan 130 Monthly value is average for three previous months Ontario Quebec Central Canada Present Situation Index 70 Atlantic

14 Canadian Regional Consumer Confidence Indices Bleak Outlook on Next Six Months for all of Canada The Expectations Index continues this quarter s downward trend, as every region s outlook on the next six months endured a large decline this quarter. The memories of a strong start to 2011 are now all but forgotten, especially for the Prairies. Quebecers and Atlantic Canada continue to trail the average, and now Manitoba/Saskatchewan can be added to the list as well. Western Canada Expectations Index Atlantic Canada Expectations Index Alberta British Columbia Manitoba/Saskatchewan Central Canada Expectations Index Atlantic 14 Monthly value is average for three previous months Ontario Quebec

15 Canadian Regional Consumer Confidence Indices Buying Intentions Up on the East Coast, Down on the Prairies The Buy Index showed the highest amount of variability of all the indexes. Western Canada continued its downward trend with the exception of BC which has improved slightly for the second straight quarter. Central Canada continues to hover around the average and Atlantic Canada has narrowed the gap between the rest of Canada. Western Canada Buy Index Alberta British Columbia Manitoba/Saskatchewan Atlantic Canada Buy Index 70 Central Canada Buy Index 70 Atlantic 15 Monthly value is average for three previous months 70 Ontario Quebec

16 Indices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director

17 About the CCI Study Seven questions make up thecoresurvey of Consumer Confidence. The overall CCI index uses all 7 questions to produce an index score. Scores for each of the three sub-indices are calculated from some of the questions, as noted below. TNS has been conducting the CCI study since July In May 2005, all the index scores were set to and so the upward and downward changes in the scores since then should be read in relation to that benchmark. CCI Index: Includes all 7 variables Present Situation Index: How would you describe your country's current economic situation? How would you describe your country's current employment situation? Expectations ti Index: What do you think will be your country's economic situation in the next 6 months? What do you think will be your country's employment situation in the next 6 months? What do you think your income will be in 6 months time? Buy Index: Taking into consideration the cost of things today and the financial situation in general, to what extent would you say that now is a good or bad time to buy products such as: a house or apartment, a car, household appliances such as a washing machine, a refrigerator, a TV set etc.? 17

18 Indices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director

19 About the CCI Study Director About Norman Baillie-David, MBA, CMRP: Norman ( Norm ) Baillie-David is Vice President and Director of Public Opinion Research, Head of Qualitative Research and Strategy for TNS Canada, and he leads the TNS office in the Capital Region. Norm also sits on the TNS Global Steering Committee for Political and Social Research. Norm is a seasoned market researcher and bilingual focus group moderator, with more than twenty five years of experience in market and social research and strategy t development. As a bilinguall and bicultural l Montrealer originally, Norman is one of those rare researchers who conducts research in a seamless and transparent manner among both English and French Canadians, with each group believing that he is one of their own. The result is a keen insider s perspective on sentiments across the country among both English and French. Having conducted more than 1,000 surveys and many more focus groups, Norm is constantly abreast of what Canadian consumers across the country are thinking and feeling about their prospects. Norm has designed and managed more than 1,000 surveys in a wide-variety of areas, ranging from high-technology to consumer products, and Norman is a recognized expert in complex survey methodology design and multivariate statistical analysis. He is in frequent demand by the media and market research industry in Canada to speak on the comparisons and contrasts of public opinion in Quebec and the rest of Canada, and has published widely. In addition, Norm has conducted assignments in more than 40 different countries around the world, and has a keen interest in cross-cultural issues, especially related to public opinion and the use of technology. Before joining TNS Canada, Norm was Managing Partner of an Ottawa-based public opinion research and management consulting firm ( ). He spent most of his preceding career at the management consulting firm PricewaterhouseCoopers/Coopers & Lybrand, as well as three years with a well-known Quebec market research firm. He is a Certified Marketing Research Professional (CMRP), member of the Market Research Intelligence Association (MRIA), and he served as a President of the Ottawa Chapter from 2002 to If you would like to add proprietary questions to the CCI study, obtain full tabular results, receive a historical time series for all the index scores, or if you have other inquiries about CCI, please contact: norman.baillie-david@tnsglobal.com (613) , x101 19