Canadians’ outlook on the economy darkened in October as decades-high interest rates continue to sap consumer spending, the housing market and growth. Two thirds of participants in the latest Maru Public Opinion survey said they do not believe the economy will improve over the next two months, an increase of two percentage points from September.

Signs have been building in recent weeks that Canada’s economy is stalling. Gross domestic product was flat in August, and a similar estimate for September has economists predicting that the country is already in a technical recession or two straight quarters of GDP contraction. A weaker jobs report for September added to evidence of a fading economy.

Canadians are also more negative about their personal finances. The Maru’s Household Outlook Index (MHOI) fell further into pessimistic territory to 83 from 84 the month before — the lowest reading since its inception in April, 2021. Anything below 100 on the index is negative and anything above indicates optimism.

Only 10% of people surveyed said their financial position has improved and almost four in 10 people said they rely on government benefits to make ends meet. The latter is the highest level since the depths of the pandemic in July, 2020, said Maru.

Fewer Canadians said they intended to buy a home and more said they were considering moving to a smaller home. The number of people who said they would invest in financial markets fell to 28% from 31% in the previous survey.

Source: Financial Post