Canadian Consumer Confidence Falls
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The Conference Board of Canada’s Index of Consumer Confidence fell by 32 points in March, the largest monthly decline ever. Canadians are clearly anxious about the coronavirus, and are mostly staying home both because the government is encouraging them to do so and also because they are afraid of venturing outside more than absolutely necessary.
Consumers are concerned about future job prospects and that their financial situation will get worse. Accordingly, many feel that this is a bad time to make a major purchase.
Click here to see the Conference Board report.
Truth is, the government response to the coronavirus will have a significant and lasting impact on jobs and on the economy. This would be bad enough, but the negative consumer psychology could make it worse. Many people will have their finances significantly impaired by the lock-down and will be in no position to buy real estate or make other major purchases. Many others, however, may still be in good financial shape but simply be afraid to buy anything out of concern that the virus might return, the economy might continue to get worse, and/or they might still lose their job.
The combination of a weak economy and a fearful, timid consumer could set up a downward spiral, where the worse things get, the more people will tend to hunker down, buy less and save their money which, of course, will make things even worse.
We definitely need to work more on ’emphasizing the positive’ about how the virus is coming under control, how people are getting back to work, how businesses are up and running. We need as much good news as possible about how everything is getting better, and less bad news about how many more people got sick or died today and how dangerous the virus is.
It’s time for the media and government officials to step up to the plate and start instilling hope instead of fear.
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