May 6th - 2012

On the Markets: Optimism over economy declines, says survey

Ontarians were among the most optimistic in the country about the national economy two years ago, but their outlook has been sliding and they are now among the least optimistic, according to a recent survey.

Ontarians were among the most optimistic in the country about the national economy two years ago, but their outlook has been sliding and they are now among the least optimistic, according to a recent survey.

Only 32 per cent of people in the province expect to see improvements over the next year compared to 42 per cent last year and 60 per cent in 2010, the RBC Canadian Consumer Outlook report reveals. In addition, fewer Ontario residents (34 per cent) anticipate that their own financial situation will improve through 2012, compared to 43 per cent two years ago.

Residents of Ontario are the most anxious in Canada about their job security, the report finds, with 26 per cent concerned that a household member will lose their job in 2012, an increase of three percentage points over last year.

Some of these concerns may be warranted, based on indicators that the province’s employment outlook is expected to continue to face challenges through the remainder of this year.  “Ontario’s job market has shifted down several gears since a strong start in early 2011,” the report states. “The unemployment rate in the province rose to 8.1 per cent in January 2012 after a loss of 7,500 jobs was reported. However, we expect to see the economy pick up pace over the course of this year, supported by factors such as stronger U.S. growth.” 

Asked about personal finances, 45 per cent of Ontarians said they believe they are stable, while 29 per cent reported losing ground and 26 per cent responding that they are getting ahead financially. The average Ontarian now carries $13,043 in personal (non-mortgage) debt, compared to the national average of $11,729.

More than half of residents (54 per cent) in the province say they have delayed major purchases such as a car, household appliance or vacation due to current economic conditions -- just over the national average of 53 per cent.

On the up side, the poll indicates that Ontarians are trying to take more action to control their financial futures. Over the next year, three out of 10 say they plan to focus on reducing debt, 32 per cent intend to spend less, 22 per cent say they will save or invest more, and 25 per cent say they are aiming to take all of these actions.

To view the full report, visit www.rbc.com/newsroom and click on Special Reports.

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