Canadian consumers will not be urged to return to travel agencies, restaurants and their former social activities as soon as the progress of the vaccination allows them to do so.
Asked about the subject by the Bank of Canada, they even expected to increase their spending (+ 4.6%) almost two and a half times faster than their income (+ 2%) over the next year, a gap never seen since. that the Canadian central bank conducted its first Consumer Expectations Survey more than six years ago. “In fact, consumers plan to spend in the next two years more than a third of the savings made during the pandemic”, she reported on Monday, revealing the results of her quarterly survey of around 2,000 heads of household.
When asked from February 15 to March 4, as the second wave of COVID-19 waned and before the third forced another tightening of health measures, consumers continued to view the future with caution, saying s ” expect the economic recovery to be slow and the threat of the pandemic not to subside until the second half of the year. This caution was particularly noticeable among women and low-income households hit hard by the crisis.
Almost half also said, however, that they planned to “resume [leurs] economic and social activities as before the pandemic ”when the majority of Canadians would have received their vaccine. More than a quarter of respondents aged 25 to 54 and over a third of those aged 18 to 24 even thought they were taking part in more activities than before COVID-19, unlike their seniors aged 55 and more, 43% of whom do not believe that the progression of the vaccination will be enough to convince them to completely resume their old life.
Of all the areas where you intend to increase spending with advances in immunization, the most common are travel, transportation, restaurants, movies and social activities, followed by accommodation. Despite rising housing prices, around 10% of respondents (14% of renters and 9% of owners) are considering buying a house or apartment thanks to low interest rates, ‘increased savings during the crisis and “changes in behavior induced by the pandemic” which lead buyers “to favor more spacious housing and to move away from city centers”.
Consumers plan to spend more than a third of the savings made during the pandemic over the next two years
Businesses too
Consumers aren’t the only ones eager to loosen the purse strings. Almost 60% of Canadian businesses plan to increase their investments in machinery and equipment over the next year, compared to just 20% who believe they are investing less than in the past twelve months. The favorable 40-point gap between the two schools of thought is a peak since the Bank of Canada conducted its first Business Outlook Survey in 1998, she reported on Monday, unveiling the spring edition of her quarterly survey, also conducted from mid-February to early March.
These investments will be made in particular in the automation of production and the digitization of activities to promote online sales and teleworking. They will aim, among other things, to loosen the constraint exerted by the scarcity of manpower within the framework of strategic plans planned for a long time, but also of a strengthening of the demand “emanating from Canadian and foreign customers – especially American. », Reports the Bank of Canada.
This beautiful optimist was not shared by all before the third wave occurred. It was the work of nearly two-thirds of the companies, who said their sales had already reached or exceeded their pre-pandemic levels. While half of respondents said that the second wave and its set of tightening health rules had “less adverse effects than the first, if any,” a fifth of companies said, for their part, have already lost hope of regaining their pre-pandemic sales levels, particularly in the tourism and non-essential retail sectors.
Good news
All these trends are rather good news, even if they reflect the state of mind before the third wave, said Desjardins Group economist Benoit P. Durocher, in a brief analysis. “Overall, the survey results paint a very positive picture for the Canadian economy, especially once the vaccination campaign is on track. In addition, the presence of pent-up demand in accommodation, restaurants, travel and leisure suggests that these sectors could ultimately benefit from a significant catch-up. “
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