While the COVID-19 pandemic has seen a resurgence in cases over the past month or so, Canadians remained optimistic – if guarded – about their economic prospects, according to a new poll by the Bank of Canada.
In the latest edition of its Canadian Survey of Consumer Expectations, covering August 17 to September 1, the central bank said that Canadians “are more willing to engage in some economic activities compared with the second quarter… [but] consumers expect that the overall recovery will be slow.”
This cautious positivity will be especially apparent in terms of employment prospects, the BoC said.
“Indicators of labour turnover, income and spending improved slightly after tumbling in the second quarter of 2020. This improvement is consistent with the reopening of the economy,” the bank said. “Consumers’ expectations for labour market conditions improved but remained lower than they were before the COVID‑19 outbreak… Consistent with the observed rebound in the housing market, consumer’s expectations for house price growth have recovered from the weakness seen in the second quarter.”
Stability, or the lack thereof in some aspects, was the running theme among those polled.
“Expectations about wage growth remained below their pre-pandemic level,” the BoC said. “Some respondents feel more confident now about their job prospects: the reported likelihood of losing a job declined from the peak seen in the second quarter, and respondents also reported having better chances of finding a new job if they were to lose their current job.”
Similarly, business sentiment improved during the quarter, although it’s still at near historic lows.
“Firms reported their sales prospects are limited by weak demand and precautionary health guidelines, and that their investment and hiring plans remain Modest due to elevated uncertainty,” the BoC said in its poll of businesses covering Aug. 24 through Sept. 16.
The infrastructure, real estate, and natural resources industries registered the greatest rise in optimism, with their recovery well on the way and largely expecting pre-pandemic levels of operation within a year.
Meanwhile, tourism and related industries where social distancing is impractical are those who won’t see recovery within 12 months.