RBC Canadian Consumer Outlook Index
TORONTO, July 20, 2011 /CNW/ -Canadians are delaying vacation plans, shopping around for groceries, following their budget more closely and holding onto their older vehicles, thanks to rising gas and food prices that are stretching household budgets across the country, according to quarterly findings released today from the RBC Canadian Consumer Outlook Index (RBC CCO).
With gas prices rising 29.5 per cent in May alone (the biggest jump since September 2005) and food prices climbing 4.2 per cent in the same month, Canadian consumers are responding in very practical ways, listing as their top three solutions:
increasing their comparison shopping for food (55 per cent)
following their budget more than before and buying less on impulse(48 per cent)
using their vehicles less, making fewer trips and using public transit/walking more (29 per cent).
Changing economic factors are also weighing heavily on vacation planning and new vehicle purchases. Almost one-third (30 per cent) of Canadians report that they are more likely to delay vacation plans until 2012 and an almost equal number (31 per cent) are delaying getting a new vehicle and making do with their present one longer than usual.
At the same time, Canadians estimate that they are carrying an average of $13,058 in personal debt (not including mortgages). In addition, fewer feel confident they are managing all their debts well, compared to the previous quarter (30 per cent versus 38 per cent). Reducing what they owe (32 per cent) tops the list of personal financial measures Canadians are planning this year, followed by spending less (28 per cent) and saving or investing more (24 per cent), while 21 per cent say they will be taking all of these actions.
"Canadians are continuing to focus on managing their debts - a very good sign as we enter the second half of the year," said Richard Goyder, vice-president, Personal Lending, RBC. "It's encouraging to see consumers are trying to live within their means and seeking out very practical ways to not only pay their bills but also to save and invest. Personal financial advice can be an excellent source of ideas to help ensure Canadians carry out these very good financial intentions."
Four-in-ten Canadians (39 per cent) expect their personal financial situation to improve over the next year, while a similar number (42 per cent) are optimistic that the national economy will improve over the same time period.
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