Consumer confidence soars

October 8, 2009
Winnipeg Free Press
Written by: Murray McNeill

Should keep cash registers humming during Christmas season, researchers predict

Consumer confidence is at an all-time high in Winnipeg, and that has experts forecasting a merry Christmas for local retailers.

A new Jory capital/Winnipeg Free Press consumer confidence survey found 87 per cent of adult Winnipeggers are optimistic about the city's economic future.

That's 17 percentage points higher than it was a year ago, when the global economic recession was starting to take hold, and the highest it's been in the nearly 14 years since Probe Research began conducting the quarterly surveys.

What's even more encouraging is that 38 per cent of the 1,000 Manitobans surveyed also said they expect their own financial situations to improve over the next year.

That's five percentage points higher than a year ago.

It's also substantially better than the results from a recent Conference Board of Canada survey, which found only 28 per cent of Canadians thought they'd be better off financially a year from now.

Probe Research president Scott McKay and University of Manitoba marketing professor Rob Warren said those kinds of confidence numbers should keep the cash registers humming during the upcoming Christmas shopping season.

"When people are confident, not only about their existing income but also their longer-term income, they'll spend more money," Warren said.

"To have Winnipeg consumers feeling that strongly about the place where they live has got to be good news (for retailers)," McKay said. "It's got to be good for everybody."

Although the survey found rural Manitobans weren't as upbeat -- only 79 per cent of them said they were optimistic about their community's economic outlook -- McKay and Jory Capital CEO Patrick Cooney blamed that on the cold, wet weather this past spring and summer, on weak commodity prices and on the financial crisis within the local hog industry.

Luke Nolan, owner of The Haberdashery Guys & Girls store on Albert Street, said he was already feeling pretty good about his retail prospects for this Christmas.

And now he's feeling even better after hearing the latest consumer-confidence numbers.

Nolan said he's also found consumers tend to spend more freely if they're feeling good about the local economy.

"And I think this area (the Exchange District) is also getting busier," he said.

"So I think this Christmas will be good."

Probe also asked Manitobans how confident they were the Canadian recession is now behind us, and three out of five (59 per cent) said they thought it was. McKay said that's likely another reason why Winnipeggers are so upbeat about the future.

Another was the fact Manitoba wasn't as hard hit by the recession as most other parts of the country, he said.

"I do believe that most Manitobans never thought we were in a recession here..."

While a majority of Manitobans think the Canadian recession is over, Jory's Cooney isn't one of them.

He said consumer and government debt loads are still way too high and Canada's leading trading partner -- the United States -- is still in a lot of economic trouble with a weakening currency and rising unemployment rates.

"We're not out of woods yet, by any means," he said.

murray.mcneill@freepress.mb.ca

Poll highlights

Here are some of the highlights from the latest Jory Capital/Winnipeg Free Press consumer confidence poll, with a brief commentary on each:

• Three in five adult Manitobans (59 per cent) believe the Canadian recession is over.
• "I do believe that most Manitobans never thought we were in a recession here..." said Scott McKay, president of Probe Research Inc. the polling firm that conducted the survey. "We're not in the auto belt like Ontario or in the oil belt like Alberta. We're in the right place at the right time with this (economic) diversity we have."
• Older Manitobans (55 plus) are less upbeat about their current financial situation and their prospects for the next year than their younger counterparts (18 to 34 years and 35 to 54 years).
• McKay and University of Manitoba marketing professor Rob Warren blame that on the financial beating many investors took during last year's stock-market meltdown.
• "If I'm an older investor who lost 25 per cent of the value in my (investment) portfolio, I know I'm highly unlikely to recover the full 25 per cent... because it's going to be a longer recovery," Warren said. "And the returns I get after that aren't going to be as good as they were (before the meltdown)."

Poll facts

The Jory/Free Press poll was conducted between Sept. 14 and Sept. 27. With a sample of 1,000 people, one can say with 95 per cent certainty the results are within plus or minus 3.1 percentage points of what they would have been if the entire adult population of Manitoba had been interviewed.