Consumer confidence was up for the third straight month in May, according to the Conference Board of Canada. The Board’s Index hit 77.3, up 0.6 points from April and up nearly 6 full points since February.
Focusing on finances, the number of respondents who see their situation improving in the coming months rose to 17%, an increase of 1.3%. Those who see things getting worse declined slightly from 23.7% to 23.1%. The majority – those who expect no change – remained the same.
When asked about their current finances the number who reported no change was up 2.4%, while those who felt there had been a decline was reduced by 2.2%. The number who felt there had been no change remained flat.
The monthly Bloomberg-Nanos reading on consumer confidence also registered an increase as of the end of April, climbing to 51.5 from 48.8 in the preceding four weeks.
The reasons for the improvements are not clear. They may be seasonal and they may be linked to the Bank of Canada’s pause on interest rate increases.
However, both the central bank and the Canada Mortgage and Housing Corporation have issued warnings. They both point to the heavy debt-load being carried by many Canadian households; in particular mortgage debt. The BoC is warning that virtually every mortgage in the country will be more expensive by the end of 2026 and CMHC says the amount of consumer debt in Canada is currently greater than the country’s GDP.