Canadians are becoming more optimistic about their finances #CanadaFinance

Article content

Canadians continue to show more green shoots of optimism regarding their financial prospects as the Bank of Canada cuts interest rates, suggests the most recent results of a survey that tracks how they feel about their money situation and the economy.

Maru Public Opinion, which has run the survey since 2020 and the accompanying Maru Household Outlook Index since 2021, said financial optimism is showing up in several areas, including people’s homebuying intentions, their intentions to invest in their retirement and an ongoing improvement in the perception of their local economies.

Article content

For example, 13 per cent of people — up from 11 per cent in the previous survey — said they would likely buy a house over the next two months, with younger people in the 18-34 age group and people living in Manitoba, Saskatchewan and British Columbia most likely to make a move. More people also said they would “very likely” buy a home in the next 60 days.

“This rise reflects a steady upward lift since reports surfaced in May that the Bank of Canada was likely to begin cutting interest rates in June,” John Wright, executive vice-president of Maru Public Opinion, said in a press release.

But, Wright also interpreted the housing data to mean that affordability and debt have likely put people in a position to sell their current home to downsize.

“There is growing pressure that there is group who need to get out from under debt and expense,” Wright said. “The marketplace  is not just a buyer’s market, there is a great pent up demand for selling.”

Either way, “anything that moves the market place for buying homes is generally seen as a positive,” he said.

A rising number of people also told Maru that they intend to put money aside for their retirement. At 56 per cent, up four percentage points from the previous survey, the share is the highest since January 2021.

Article content

Article content

Furthermore, 45 per cent now think their local economy will improve over the next two months. It’s not a “huge” number, Wright said, but it’s headed in the right direction.” The metric has steadily increased since July, when it stood at 38 per cent.

These positives pushed up the Canadian Maru Household Outlook Index for the third straight month to 90 — an increase of four index points from June.

Anything below 100 on the index, which measures people’s outlook on the economy and their personal finances, indicates negative sentiment and anything above 100 indicates optimism. The index has been stuck in the red since December 2021 and hit its most pessimistic reading — 83 — in March 2023.

On the negative side of the ledger, 41 per cent of those surveyed said they will struggle to make ends meet, an increase from 38 per cent in the previous survey.

Wright said this reading matches that of June, just missing the high of 43 per cent recorded in May 2023, and “has been on a steadily increasing trajectory since April 2023 (34 per cent).”

This doesn’t cancel out the positives, he said, adding that “there are different demos at play.”

Article content

“There’s a group that continues to find it difficult to make ends meet and it’s growing over the last couple of years. Especially in urban centres,” Wright said.

Maru also said 44 per cent of people believe the national economy will improve over the next two months, while 56 per cent said they didn’t think it would, unchanged from the previous survey.

Fifty-four per cent said they would worry about their family’s day-to-day finances, an increase of two percentage points, while 85 per cent indicated they would have the ability to purchase the items their family needs, which was unchanged from the previous reading.

Less than one-fifth said they would default on a major loan or payment, such as a mortgage, a one percentage point increase. and 11 per cent said they would likely declare bankruptcy, also up one percentage point.

Maru conducted the survey from Aug. 30 to Sept. 2 among a random selection of 1,531 Canadian adults.

• Email: [email protected]

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Article content