National Household Spending Sees a Third Consecutive Monthly Increase
Index of Consumer Spending
The Index of Consumer Spending (ICS) averaged 88.5 points in September, a 0.3-point increase from last month (the week of April 10, 2022 = 100).
- Following increases of 1.4 points in July and 0.3 points in August, September’s jump of 0.3 points marks three consecutive monthly increases.
- From 87.8 points during the week of August 27, the first week of September saw the index rise to 88.9 points. The following week, it remained relatively stable, but it declined to 88.2 during the week of September 17 and fell further to 88.0 during the week of September 24.
- In September, the Bank of Canada announced that it would be holding its policy interest rate at 5.0 per cent following an increase in July. This news may have persuaded some consumers that the Bank had reached its rate hike ceiling, leading them to release some pent-up savings.
- Quebec saw several large investment announcements in September, including Volta Energy Solutions’ announcement of a $750-million battery copper foil factory in Granby and Northvolt AB’s announcement of an estimated $7-billion fully integrated lithium-ion battery gigafactory outside of Montréal. Collectively, these projects are expected to employ more than 3,000 people once they’re built, while also creating construction jobs in the interim. Quebec’s Index of Consumer Confidence also rose in September, with notable upticks in the share of respondents expecting their future finances and job prospects to improve. These results indicate that the project announcements may have induced some spending as some residents expect increased labour demand and opportunities related to the factories’ construction in the coming months.
- In September, both ends of the country were impacted by natural disasters—the East Coast was hit by Hurricane Lee, and the West Coast was still reeling from wildfires that continued into the early weeks of September. While the national ICS rose, the combination of the disasters diminished some consumer spending by limiting tourism and other commercial activity.
- The Northwest Territories increased its hourly minimum wage from $15.20 to $16.05 in September. The region has seen some pullback in its spending compared to where it was in May as Canada’s worst wildfire season impacted the territory and surrounding regions throughout the summer. The bump in the Northwest Territories’ minimum wage might help increase the region’s spending in the coming months and reverse its current downward trajectory.
Alberta
The index rose 2.0 points, averaging 94.4 points in September.
During the week of September 3, Alberta’s index sat at 94.4 points. In the following week of September 10, it increased to 95.6. The index then fell slightly during the week of September 17 to 94.3 points, and by the week of September 24, it reached a final score of 93.2. In September, Alberta experienced a significant increase in its consumer confidence, specifically regarding current and future financial outlooks and job prospects. Linked to this increased positivity is likely Crescent Point Energy Corp.’s September announcement of their 2024 preliminary budget and development capital expenditures of close to $1.1 billion, with 70 per cent of this sum allocated to its Kaybob Duvernay and Alberta Montney plays. Residents likely spent more as some might expect this development to increase local job availability.
Atlantic region
The index averaged 98.1 points, down from 100.9 points in August.
During the week of September 3, the region’s index stood at 96.7 points. The subsequent week of September 10, its index decreased to 96.4. In the week of September 17, the index saw an increase of 1 percentage point to 97.4, and by September 24, it surged to 101.9 points. In September, Hurricane Lee’s heavy winds and rainfall likely slowed some of the region’s spending as it forced residents indoors and caused significant power outages across the region. Nova Scotia Power reported that 277,000 customers were affected by outages, while NB Power and P.E.I.’s Maritime Electric reported that about 67,000 and more than 1,000 of their customers, respectively, were affected.
British Columbia
The index edged up 0.1 points to 88.8 points.
British Columbia’s index began at 88.5 points during the week of September 3 before increasing to 89.3 during the week of September 10. The index was relatively unchanged in the week of September 17, but the week of September 24 saw the index decrease by 1.1 points to 88.1. On August 31, the provincial government extended its state of emergency until mid-September, meaning thousands of its residents remained under an evacuation order or alert. This emergency likely stifled spending in the province.
Ontario
The index averaged 82.0 points in September, down from 82.4.
During the week of September 3, Ontario’s index reached 83.1 points before seeing a decrease to 81.9 during the week of September 10. This decline continued into the week of September 17, with the index reaching 81.6 points, where it held steady during the week of September 24. This minor drop in the index’s average for the month is in line with the province’s labour force characteristics in September—Ontario saw a slight pullback in employment, with the unemployment rate increasing 0.1 percentage points to 6.0 per cent.
Quebec
The index average saw a slight uptick of 0.7 points to 88.5 points in September.
Quebec’s index sat at 89.1 points during the weeks of September 3 and September 10. In the week of September 17, the index decreased to 88.1, and further declined to 87.6 during the week of September 24. The jump in employment in the province was likely responsible for the monthly average increase. Compared with August, the province saw a sizable increase of approximately 38,700 jobs. Of these, approximately 23,500 were full-time jobs and 15,100 were part-time jobs.
Manitoba–Saskatchewan
The index increased 1.6 points to average 104.1 points.
The region’s index began at 104.6 points during the week of September 3 and increased to 105.5 during the week of September 10. However, during the week of September 17, the index decreased to 103.3 points, and it continued to decrease to 103.1 during the week of September 24. Manitoba–Saskatchewan’s September ICS average was likely influenced by the region’s marked improvements in its labour force characteristics. From August to September, Manitoba’s unemployment rate fell 0.7 percentage points to 5.0 per cent. Likewise, Saskatchewan’s unemployment rate dropped 0.5 percentage points to 4.9 per cent.
Territories
The index averaged 95.3 points, down from 99.1 in August.
During the week of September 3, the region’s index started at 89.0 points and showed a notable increase to 93.6 during the week of September 10. The trend of growth continued in the week of September 17, with the index reaching 100.3 points. However, it decreased to 98.3 during the week of September 24. The early weeks of September were affected by August’s wildfires, with the Northwest Territories extending its state of emergency until September 11. While residents were allowed to return starting September 6 under an evacuation alert, Highways 2, 5, and 6 remained closed to the public. Further, the territory saw some park closures and air-quality issues, which severely limited tourism activity during one of its busiest months for travel.
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Canada’s Gross Domestic Product is largely made up of consumption. One way to gauge how the economy is performing is to look at how much Canadians are spending. Yet across the Canadian economic landscape, there is a lack of readily available consumer spending data. With that in mind, we created the Index of Consumer Spending for provinces and for Canada as a whole. This unique Index is powered by exclusive consumer transaction data provided by Moneris Data Services. Moneris is Canada’s number one payment processor with over 3.5 billion transactions spanning more than 325,000 merchant locations. This index is intended to inform senior policy makers how the country and the provinces are doing. Updates on this index will be released monthly.
Disclaimer: Forecasts and research often involve numerous assumptions and data sources and are subject to inherent risks and uncertainties. This information is not intended as specific investment, accounting, legal, or tax advice.