National Household Spending Sees a Third Consecutive Monthly Decrease
Index of Consumer Spending
The Index of Consumer Spending (ICS) averaged 111.2 points in October, a 2.0-point decrease from last month (the month of April 2022 =100).
- October’s decrease marks three consecutive monthly decreases, which have brought Canada’s ICS down from 116.8 points in July to 111.2 points in October.
- Consumer confidence, as indicated by our Index of Consumer Confidence (ICC), follows a similar trend to consumer spending. Since July, national consumer confidence has diminished from 73.6 points to 58.2 points in October.
- The streak of monthly decreases in consumer spending started in August 2023. Increased household credit market debt and a continued shift toward greater savings by consumers are likely linked to that streak.
- From Q2 2023 to Q3 2023, total household credit market debt rose by almost $5 billion. With this increase, the household debt service ratio escalated from 15.08 to 15.22 per cent. The household savings rate also continued its increase, rising from 4.7 per cent in Q2 2023, to 5.1 per cent in Q3 2023.
- The Northwest Territories had the largest increase in its ICS. This is likely a result from a return to normalcy for the territories’ following the wildfires that continued into September.
- Up to November 11, preliminary data showed that the ICS increased 3.1 points, indicating that this trend may reverse. As the index is not currently seasonally adjusted, this surge is likely due to seasonality as consumers begin to spend more in preparation for the holiday season. Additionally, since the index is measured in current dollars and not fixed, this rise also reflects the ongoing effects of inflation.
Alberta
ICS fell 3.0 points in October.
Alberta’s ICS fell from 119.0 to 116.0 points in October. Preliminary data for November (up to November 11) showed the province continuing to decline slightly with its ICS at 115.9 points.
British Columbia
ICS dropped 4.7 points in October.
British Columbia’s ICS dropped to 106.2 points in October. Up to November 11, preliminary data showed the province continuing to decline with its ICS falling another 0.5 points to 105.7 points.
Manitoba
ICS diminished 1.2 points in October.
Manitoba’s ICS decreased to 121.6 points in October. Preliminary November data (up to November 11) showed the province leveling off slightly with its ICS’ average current volume increasing only 0.2 points.
New Brunswick
ICS grew 0.9 points in October.
New Brunswick’s ICS had a minor increase from 118.6 points to 119.5 points in October. November preliminary data (up to November 11) indicated that the province reversed course, with a decline to an ICS of 116.6 points.
Newfoundland and Labrador
ICS dropped 8.7 points in October.
Newfoundland and Labrador’s ICS dropped 8.7 points to 113.9 points in October. This is the second month in a row that the province has seen a decline. November preliminary data (up to November 11) showed the province recovering a bit from October, with a 2.6-point increase to 116.5 points.
Northwest Territories
ICS grew 25.9 points in October.
The Northwest Territories’ ICS had a large recovery, jumping from 85.5 points to 111.4 points in October. This is expected to continue in November. Preliminary data, up to November 11, showed the territories adding another 6.6 points to increase to 118.0 points.
Nova Scotia
ICS declined 3.5 points in October.
Nova Scotia’s ICS dropped to 128.6 points in October. Despite this decline, Nova Scotia’s average was the highest in Canada. Preliminary data for November (up to November 11) showed the province continuing to decline with its ICS dropping another 1.8 points to 126.8 points. If this trend holds, the province will fall to third behind PEI and lose its top spot to Quebec.
Nunavut
ICS grew 3.3 points in October.
Nunavut’s ICS has seen consecutive monthly increases since June 2023, with it increasing to 116.8 points in October. However, this streak is expected to end in November. Preliminary data, up to November 11, showed the territory’s ICS diminishing by 13.2 points.
Ontario
ICS decreased 3.3 points in October.
Ontario’s ICS dropped to 103.6 points in October. However, November preliminary data (up to November 11) showed the province poised to completely reverse October’s decline with its ICS increasing 6.6 points.
Prince Edward Island
ICS plummeted 19.1 points in October.
PEI’s ICS had a large drop to 123.5 points in October. This comes after September’s significant decline from 188.4 to 142.6 points. However, November preliminary data (up to November 11)showed the province beginning to recover. With an average increase of 3.9 points, PEI’s ICS will recover to 127.3 points.
Quebec
ICS grew 3.7 points in October.
Quebec’s ICS rose to 124.5 points. Preliminary data for the month of November (up to November 11) showed the province’s average increasing to 127.9 points This indicates a continuation of Quebec’s upward trend. If this increase holds, Quebec is on track to have the highest ICS in November.
Saskatchewan
ICS had a minor drop of 0.3 points in October.
Saskatchewan’s ICS dropped from 111.5 to 111.1 points in October. This is expected to continue with November preliminary data (up to November 11) showing the province dropping 1.0 points to 110.1 points.
Yukon
ICS fell 11.3 points in October.
The Yukon’s ICS fell to 116.3 points in October. This marks three consecutive monthly declines. This trend is expected to end in November as preliminary data (up to November 11) showed the territory adding 1.9 points to its ICS.
October’s decrease marks three consecutive monthly decreases, which have brought Canada’s ICS down from 116.8 points in July to 111.2 points in October.
Powered by Moneris Data Services
The Index of Consumer Spending’s (ICS) methodology has been revised beginning in November 2023. The ICS no longer tracks the year-over-year change in consumer spending on a weekly basis. Instead, the ICS now tracks the net change in transaction volume month-over-month, with a set starting point (April 2022 = 100).
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.