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Consumer confidence in Canada edged ever-so-slightly higher in June, a new survey says, but Canadians are holding back on major purchases and are still deeply worried about job prospects and family finances.
The Conference Board of Canada's index of consumer confidence rose 0.7 points to 82.1 - a barely discernible rise after larger increases in the previous three months. Since March, confidence has risen 10.6 points, a distinct turnaround from the record-low readings taken at the end of 2008 and the beginning of 2009.
"Consumers are seeing a light at the end of the tunnel," the Conference Board said.
While the index measures feelings rather than actions, analysts at the Conference Board have found a close link between a rise in confidence and an eventual increase in consumer activity. A 10-point rise in the index usually indicates that consumption growth will be 1 per cent stronger a year from now.
Still, the rebound is tentative, and from a low level. When asked about how they feel about their current finances, 12.8 per cent of the polled consumers said they had seen some improvement in the past six months, an increase of 1.4 points. But 28.1 per cent of respondents said their situation had deteriorated - although that's 1.3 points less than in the previous survey.
"The recession has clearly hit the financial well-being of many Canadians, as negative responses still outnumber positive responses by a more than two-to-one margin," the report said.
Consumers were more optimistic about their future financial situation, with 27 per cent saying they expect improvements - the third month in a row to show an increase. But more than half of respondents said they think their finances have stagnated.
On employment, just 16.9 per cent say they expect more jobs in their communities, while 33.7 per cent expect declines. Still, the pessimists were fewer than a month earlier.
The uncertainty seems to be prompting consumers to change their minds on major purchases. In June, 41.3 per cent said now is a good time to buy - a decline of 3.7 points from a month earlier. And 47.7 per cent said now is the wrong time to buy - an increase of 3.2 per cent.
Over all, consumer confidence tumbled in the Prairies and Quebec, reversing gains in the previous month. Atlantic Canada, British Columbia and Ontario saw increases.