Economic mood darkening, with first decrease in the national index in
nearly two years
TORONTO, May 16, 2013 /CNW/ - Most (84 per cent) Canadians believe the
food they typically purchase has increased in price over the past year,
according to the quarterly RBC Canadian Consumer Outlook Index (RBC CCO). With rising food prices eating into their household budgets,
an overwhelming majority of Canadians (91 per cent) say they will
tighten their belts and make smarter decisions when purchasing food.
The survey found that the average Canadian spends $411 per month on
groceries and one third (33 per cent) say rising food prices has had a significant impact on their budget, with 43 per cent cutting back on other expenses. Also,
increases in food prices are impacting shopping habits with more than half of Canadians (57 per cent) comparison shopping for
food more than before, and following a budget more than before and
buying less on impulse (41 per cent); others are looking to other parts
of their life to deal with rising food prices such as using their
vehicle less (15 per cent).
"In light of concerns over escalating food prices, more Canadians are
looking for cost-saving strategies they can use on their next trip to
the grocery store," said Jason Round, head, Financial Planning Support,
RBC Financial Planning. "Creating a budget that covers all of your
expenses - including must-haves such as groceries - can help keep your
spending under control. Since costs can change, it's essential to
regularly review your budget to stay on track and make any adjustments
necessary to help balance living for today and saving for future
goals."
Food inflation rose 2.4 per cent last year, after increases of 3.8 per
cent and 1.4 per cent in 2011 and 2010, respectively. A 2012 RBC
Economics report anticipated that last year's U.S. drought could send
food prices back up between 3.0 and 4.0 per cent this year. The report
also noted that it takes approximately six months for raw food
commodity price changes to pass through to prices at the retail level.
"Even though we are seeing rising food costs, overall inflation should
remain below two per cent in 2013," said Paul Ferley, assistant chief
economist, RBC. "We are in an environment of modest growth, so
pressures from rising food prices won't dominate inflationary
expectations."
The RBC CCO indicates that economic mood in Canada has darkened over the
last quarter, with the national overall index dropping six points to
rest at 82 - the first time in nearly two years that there has been an
overall decrease in the national index. Only six-in-ten (60 per cent)
Canadians think the economy is in good shape (down a significant eight points since last quarter). More Canadians
believe the economy will worsen in the next year (30 per cent) rather
than improve (26 per cent).
According to the Index, while general perceptions of the economy have
worsened, job anxiety has actually dropped, returning to more modest
levels of 19 per cent after a temporary spike to 24 per cent earlier
this year.
RBC Economics is currently forecasting the Canadian economy will grow by 1.8 per cent in 2013, and will be
releasing its next Economic and Financial Market Outlook in June.
RBC CCO REGIONAL HIGHLIGHTS
|
FOOD PRICES
|
|
NAT'L
|
|
BC
|
|
AB
|
|
SK/MB
|
|
ON
|
|
QC
|
|
AC
|
|
Have increased the past year
|
|
84%
|
|
86%
|
|
88%
|
|
89%
|
|
80%
|
|
86%
|
|
88%
|
|
Have had a significant impact on day-to-day budget
|
|
33%
|
|
32%
|
|
24%
|
|
37%
|
|
33%
|
|
38%
|
|
36%
|
|
Comparison shop more than before
|
|
57%
|
|
52%
|
|
53%
|
|
52%
|
|
58%
|
|
60%
|
|
59%
|
|
More budget conscious/less impulse buy
|
|
41%
|
|
45%
|
|
37%
|
|
40%
|
|
41%
|
|
40%
|
|
47%
|
|
Average monthly spend
|
|
$411
|
|
$415
|
|
$440
|
|
$401
|
|
$379
|
|
$448
|
|
$420
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECONOMIC CONFIDENCE
|
|
NAT'L
|
|
BC
|
|
AB
|
|
SK/MB
|
|
ON
|
|
QC
|
|
AC
|
Expect personal financial situation to improve in the
next year
|
|
35%
|
|
33%
|
|
37%
|
|
41%
|
|
35%
|
|
34%
|
|
34%
|
Expect Canadian economy to improve in the
next year
|
|
26%
|
|
30%
|
|
32%
|
|
29%
|
|
30%
|
|
17%
|
|
21%
|
|
Anxious about potential job loss in the next year
|
|
19%
|
|
17%
|
|
13%
|
|
13%
|
|
24%
|
|
13%
|
|
22%
|
About RBC financial advice and interactive tools
Canadians can access RBC Financial Planning and rbc.com/savingsspot for free planning, budgeting and savings advice and resources, or to
find the nearest Investment and Retirement Planner. In addition, Canadians who want to get more from their day-to-day
banking, protect what's important, save and invest, borrow with
confidence or take care of their businesses, the RBC Advice Centre can help answer their questions. Interactive tools and calculators such
as the Debt Reduction Plan and Debt Consolidation Calculator, provide customized information covering many facets of personal
finance. All personal RBC online banking clients also can use myFinanceTracker, a no-cost interactive financial management tool, to create a set
budget, track their spending habits and access tax-related apps in myTax Centre, to help manage and plan their taxes.
About the RBC Canadian Consumer Outlook Index (RBC CCO)
Benchmarked as of November 2009 to a baseline of 100, the RBC CCO is
conducted online via Ipsos Reid's national I-Say Consumer Panel to
3,024 Canadians (560 British Columbia, 407 Alberta, 291
Saskatchewan/Manitoba, 866 Ontario, 579 Quebec, 321 Atlantic Canada).
Weighting was then employed to balance demographics and ensure that the
sample's composition reflects that of the adult population according to
Census data and to provide results intended to approximate the sample
universe. Data collection was April 2 to 15, 2013. The precision of
Ipsos Reid polls are calculated using a credibility interval. In this
case, the poll is considered accurate within ± 2 percentage points of
all Canadians.
SOURCE: RBC
