Consumer confidence declines slightly in Q3

October 28, 2010, Canada – A growing number of Canadians think the recession is over, but many are still being cautious in their spending, according to Nielsen’s Consumer Confidence Index.

For the third quarter of 2010, the Index shows that 54 per cent of Canadians think the country is out of recession, compared to 56 per cent last quarter, and 65 percent in the first quarter of 2010.

However, fewer Canadians plan to spend their spare cash on holidays and vacations (24 per cent versus 26 per cent last quarter) or out of home entertainment (18 per cent versus 26 per cent in the second quarter). In fact, four in ten (40 per cent) plan to use their spare cash to pay off debts, credit cards and loans. That represents a six-point increase over last quarter.

“In Canada, despite the increase in consumer confidence over the past year, Canadians remain cautious when it comes to opening their wallets,” said Carman Allison, Nielsen’s director of industry insights. “Consumers are still very much focused on value, continuing to shop at discount retailers and buying on promotion at record levels. After a year of rising prices, we now see a leveling of consumer packaged goods inflation as retailers continue to use price and promotions to win over the consumer.

Nielsen found that although consumer confidence in Canada dipped slightly (to 101 from 102 last quarter), Canadians are much more confident than their neighbours to the south. In the U.S., consumer confidence dropped six points, from 87 in the second quarter to 81 this quarter. A consumer confidence level of 100 is considered average.

The Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among thousands of Internet users in 53 countries, including almost 500 Internet users in Canada.