Global Economy, Consumer Confidence, And Canadians
First Published: Published Date : June 11, 2009 ADawnJournal.com
The state of the global economy in recent times has been the number one story in newspapers and on TV news bulletins for quite some time now, and the negativity and pessimism of reports and predictions has inevitably translated to the consumers out there. In addition, the number of companies laying staff of has led to a further decrease in optimism about the economy. People are concerned about whether they will have a job next month, so concerns over having a plasma screen TV will be unlikely to feature at the top of their priorities. Since the governments of the world admitted one by one that there was a recession in the pipeline, it has been a case of bad news piling on top of bad news.
Amid all of the concerns, the mantra that has been repeated time and again is that the only way for the credit crisis to end is for customers to get out there and start shopping again in order to stimulate the economy. This has as often as not met with a hostile, cynical reaction as described in the first paragraph – if you aren’t sure about whether you will have a job next month, consumer spending becomes less of a priority for you, whatever the banks and politicians might say. The return of consumer confidence needs to be an organic thing – we as consumers need, ourselves, to feel that there is a reason to get out there and start spending. Signs are showing, now, that this might finally be the case.
Consumers surveyed in the last month have for the first time been broadly positive about the state of the economy going forward. A Harris-Decima poll conducted towards the end of May has put the level of consumer confidence among Canadians up at its highest level since February 2008 – before the credit crunch really took hold in a substantial way in terms of consumer understanding. The consumer confidence index, considered the most reliable way of monitoring confidence in the general public, is now sitting at 78.5 – up by 11.5 from the last reading in February 2009. Although this is different from saying that the consumers surveyed are all going to go out and buy expensive items, stimulating the economy massively as a result, it does indicate that people feel ready to spend, having been convinced that the wave of layoffs will not take their job and that they can look to the future with a modicum of confidence.
Among the other headlines of the survey is the fact that on being asked if they expected the economic situation to worsen in the coming twelve months, only 29% said they did, compared with nearly 60% in February. This considerable change in mindset may well be a foreshadowing of the consumer activity which will begin to ease the nation and indeed the world out of the tricky period that currently exists. There are no guarantees as to how things will be going forward, but with other indicators beginning to hint at a stabilization if not a recovery, there is at least some hope for the global economy to get back on track within the next 12 to 18 months.