Delivering the pulse of the nation to you A quarterly newsletter from TNS Canada SUMMER 2011
lindices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director
Indices Canadian Consumers Slowly Gaining Confidence in Economy After the Consumer Confidence Index finished 2010 in a modest decline, Canadians expressed glimmers of optimism on the economy throughout the first quarter of 2011 which has carried over to the second. In quarter two, we have seen modest increases in the Index each month, which bodes well for the second half of the year. Canadian consumers are continuing to show a slow but strengthening confidence in our economy, with consumer confidence stable or increasing for the fourth straight month. Despite setbacks such as higher gas prices, the Arab spring, the ongoing crisis in Libya (and now Syria), and most importantly, the US Debt crisis, Canadian consumers are proving themselves to be resilient over the longer term. said Norman Baillie-David, Vice President of TNS Canada and director of the marketing and social research firm s monthly tracking study. While not necessarily upbeat, Canadians are at least not slipping into the doldrums, despite a barrage of bad economic news. 105 95 85 Consumer Confidence Index.3 3
Indices Canadian Consumers Increasingly Satisfied with Current Economic Situation The Present Situation Index, which captures feelings toward the present-day economy and the employment situation, carried over the momentum gained in the first quarter of 2011, as it increased for the sixth straight month to finish June at.1 points. This marks the first time the Index has eclipsed the point plateau since late 2008, and before the 2009 recession. As evidenced by this Index, consumers are slowly, but surely feeling better about their current economic and employment situation, at least for the here and now. 130 Present Situation Index.1 70 4
Indices Continued Barrage of Bad Economic News Leaves Canadians Pessimistic about Six-month Outlook The Expectations Index, which measures people s outlook for the economy six months from now, is the only sub-index that ended the quarter on the decline, dropping from 108.3 points in May to 105.4 in June. 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. Expectations Index 105.4 5
Indices Buying Intentions for Major Purchases Not Recovering After a discouraging end to the first quarter of 2011, the Buy Index, which gauges the degree to which people think the current period is a good time to make major purchases, ended quarter two on a positive, but still well below average, finishing June at 95.4 points. This shows that even though Canadians are not hurting themselves, they are not inclined to take any risks (such as buying that new big ticket item) as long as they see the continuing i bad news on the economy, especially from south of the border. 105 95 Buy Index 95.4 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. 85 6
lindices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director
U.S. Indices US Consumer Confidence Dwindles this Quarter after Encouraging Start to the Year While Canadians have begun to show signs of hope in their economy this quarter, Americans lost all momentum gained throughout the first quarter of 2011. After finishing February at a post-recession high h (70.4), but still well below average, the U.S. Consumer Confidence Index has steadily decreased each month thereafter. Says Lynn Franco, Director of The Conference Board Consumer Research Center: This month s decline in consumer confidence was driven by a less favorable assessment of current conditions and continued pessimism about the short-term outlook. Consumers rated both current business and labor market conditions less favorably than in May, and fewer consumers than last month foresee conditions improving over the next six months. Inflation fears eased considerably in June, but concerns about employment and income prospects are getting louder and more widespread. Given the combination of uneasiness about the economic outlook and future earnings, consumers are likely to continue weighing their spending decisions quite carefully. 60 40 Consumer Confidence Index United States 58.5 20 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
U.S. Indices Americans Not Showing Any Signs of Optimism about Present Situation The Present Situation Index continued mired in the basement of historic lows, showing only very slight signs of life in April and May. However, since then the index has seen a modest drop-off and finished the quarter at 37.6. There is clearly a long way to go when it comes to consumers perception of today s economy and employment situation, and we can only hope that have something to feel better about in the coming months. Present Situation Index 145 United States 130 115 85 70 55 40 25 37.6 10 9
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, also finished Q2 in a sharp decline after a promising start to 2011. After the index climbed to 95.1 points in February - the highest the index has been since 2006 - a drop of nearly 23 points ended the Index at 72.4 points for the quarter. The drop can also likely be attributed to continued employment worries and the looming US debt crisis ii and the potential ti impact it would have had on the economy had the US defaulted on its debt. 140 60 Expectations Index United States 72.4 40 20 10
lindices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director
Canadian Regional Indices High Oil Prices Boost Confidence on the Prairies During the second quarter of 2011, the overall Consumer Confidence Index continued its marginal upward trend, with small improvements noted in all regions except for Atlantic Canada. That being said, confidence on the Prairies (Alberta and Manitoba/Saskatchewan) still remains well above the national average, while confidence on both coasts (BC and Atlantic Canada) continues to bring down the national average. The sharp rise in oil prices as a result of the Arab spring obviously makes Canadians on the Prairies i feel much better about the economythan in Central and Eastern Canada, where this is only reflected in high gas prices. Western Canada Consumer Confidence Index Atlantic Canada Consumer Confidence Index Alberta British Columbia Manitoba/Saskatchewan Central Canada Consumer Confidence Index Atlantic 12 70 Ontario Quebec
Canadian Regional Consumer Confidence Indices The Prairies Showing Much-Improved Confidence in Present Situation The Present Situation Index showed improvements in all regions, aside from Atlantic Canada, especially in Western Canada where Manitoba/Saskatchewan and Alberta rose significantly, also due to higher oil and resource prices. Both coasts (BC and especially Atlantic Canada) continue to bring down the average. 150 Western Canada Atlantic Canada 140 130 Present Situation Index 130 Present Situation Index 13 70 Alberta British Columbia Manitoba/Saskatchewan Monthly value is average for three previous months 130 70 60 50 Ontario Quebec Central Canada Present Situation Index Atlantic 70
Canadian Regional Consumer Confidence Indices Alberta Holding up Average as all other Regions Sour on Longer-term Prospects The Expectations Index continues to show somewhat greater variability between the regions. After a strong first quarter for most regions, the second quarter ended with all regions on the decline except for Alberta, which saw a large jump in expectations for the next six months. Quebecers and Atlantic Canada continue to trail the average, and now Ontario 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
Canadian Regional Buy Indices Buying Intentions End Quarter on High Note, Except in Atlantic Canada With regard to the Buy Index, most regions saw a drop to start the second quarter, however most have rebounded to end the quarter on a high note. The exception is Atlantic Canada which sawasharpdeclinetoendthequarterbelowthe average along with Quebec and BC (which both saw minor increases to end the quarter). 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
lindices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director
About the CCI Study Seven questions make up the core survey 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 2004. 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
lindices U.S. Indices Canadian Regional Indices About The CCI Study About The CCI Study Director
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 (2001-2009). 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 2004. 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) 230-4408, x101 19