Consumers shy away from major purchases
Canadians are being careful with their money and the majority of us aren’t planning on any major purchases over the next 12 months according to a recent Angus Reid study.
The Bank of Canada hoped to stimulate some faith in the economy and encourage spending when it announced rates would remain near zero. At least 56 per cent of consumers won’t be looking at major purchases despite the promise of near nothing interest rates.
Reluctance to spend in uncertain times seems to be universal as at least half of every income level reported they would not consider buying a car or a house over the coming months. The percentage rises to 65 per cent in lower income ranges.
Not an unexpected turn of events.
The one bright light, 80 per cent of respondents felt they were in a good or great financial position in July, compared to 73 per cent in April. Still, that leaves 20 per cent or one-in-five in “bad” shape.
As for how we are spending, 41 per cent continue to spend the same amount on essentials while 42 per cent have drastically cut spending on shopping, gifts and eating out.
The study is a snapshot of our finances in April and early July. It reaffirms that caution is the main choice for Canadian consumers in these times of uncertainty.
It will be interesting to see what the next instalment looks like after a couple of months of Phase III spending.