Consumers confident in February 2006

Confidence levels hit 15-year high in BC.

National consumer confidence – a significant indicator in projecting Canada's housing market – remained very strong in February 2006. Confidence levels dipped just slightly from the two-year high reached in January.

Consumer confidence has shifted several times over the past seven months. Confidence dropped significantly in August 2005, and hit a nine-year low in September in the wake of Hurricane Katrina. After remaining on the ropes in October, confidence levels rebounded in November. In January, consumer confidence completed its recovery, surpassing July 2005 levels.

The slight drop in the index in February was the result of declines in the Prairie region and Ontario. These declines just offset higher confidence levels in British Columbia and Quebec. Consumer confidence among households in British Columbia reached a 15-year high in February 2006. While the index edged down in the Prairie region, it remains at its second highest level in more than 15 years.

The only component of the index that fell on a national basis in February was sentiment about near-term job growth. The employment outlook for the next six months worsened in the Prairie region, Ontario, Quebec and the Atlantic region compared to January.

The percentage of households that said now is a good time to make a major purchase was virtually unchanged on a national basis, as well as in the Atlantic region and Ontario. Willingness to buy big-ticket items improved in the Prairie region and Quebec, while uncertainty about whether or not now is a good time to make a major outlay has begun to appear in British Columbia.

Sentiment about household budgets improved in February in British Columbia and Quebec compared to the previous month, while more households in the Prairie and Atlantic regions expect finances to remain stable over the next six months. And while more Ontario households said they expected their finances to worsen over the next six months, the overall outlook remains positive.

The Conference Board of Canada measures consumer confidence on a monthly basis.

(prepared by Canadian Real Estate Association)