The consumer confidence in Canada suffered that biggest decline in one year after the Brexit vote, according to the Bloomberg.
The index showed that Canadian’s sentiment in the domestic economy, housing prices, and job security went down after the British people voted to leave the European Union (EU).
Biggest one-week decline in Canadian consumer confidence
The index dropped to 56.7 in the first full-week of the survey after the Brexit decision from 58.3 a week earlier—the biggest one-week decline since July 2015. Each of the regions surveyed and each sub-index suffered a drop in consumer confidence—an indication that the global market turmoil has a widespread domestic impact.
The pocketbook sub-index, which measures consumers’ confidence on personal finance and job security, fell from 59.1 to 57.8 while the sub-index that measure sentiment for the economy and housing prices declined from 57.6 to 55.5 after the Brexit decision.
The Canadian consumer confidence slid in every region and almost in every age group and income range. Those in the age group 18 to 29 (with an income bellows C$15,000) were the only ones who more optimistic compared with the week earlier.
External events are likely catalysts
Bloomberg Economist Robert Lawrie commented, “This is the first significant downturn in Canadian consumer confidence in five months, and external events were the likely catalyst.”
He added, “The globalization of financial markets is a fait accompli, and whether or not this marks the start of a long-term correction in Canadian consumer sentiment will depend in part on the spillover effects on household balance sheets and the response from the respective monetary and fiscal authorities.”
The percentage of Canadians expecting an improvement in the country’s economy over the next six months fell from 16% to 23.7%, the lowest since March.
The percentage of those who are expecting that the housing prices will decline in their neighborhood over the next six months increases from 14.2% to 15.3%.
The S&P/TSX Composite Index dropped 3.1% in the two trading days after Britain decided to leave EU on June 23. Last week the index rebounded and on Monday it gained 1.3% during the early trading in Toronto, the highest level since June 8.