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Canadian Views Of The Covid-19 Economic Recovery Turn Negative

Canadians are feeling more pessimistic about the economy.

Only 12.9% of respondents believe Canada’s economy will strengthen in the next six months, the lowest level since early May, according to the latest Bloomberg Nanos Canadian Confidence Index. The rising pessimism lowered the Index to 51.8. It has now dropped for four consecutive weeks from a post-pandemic high of 53.2 in late September.

The share of respondents who see the Canadian economy weakening in the next six months rose to 56%, which means pessimists now outnumber optimists about four to one. Weakening sentiment reflects the new containment measures provinces such as Quebec and Ontario have imposed to dampen the second wave of Covid-19.

The new lockdown measures include the closures of bars, restaurants and gyms as well as limiting the number of people in social gatherings. The number of active Covid-19 cases in Canada had more than doubled in the past month to 24,177.

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Each week, Nanos Research surveys 250 Canadians for their views on personal finances, job security and their outlook for the economy and real estate prices. Bloomberg publishes four-week rolling averages of the 1,000 responses.

In addition to the Nanos numbers, the impacts of the new restrictions are showing up in high-frequency indicators. Credit-card spending growth slowed in October after the new measures were implemented, according to reports from Bank of Nova Scotia and Toronto-Dominion Bank. The spending weakness is concentrated among restaurant, travel and entertainment merchants.