Canadian consumer confidence recorded its sharpest weekly decline since the depths of the pandemic, with inflation and a deteriorating outlook for housing weighing on sentiment.

The Bloomberg Nanos Canadian Confidence Index, a measure of sentiment based on weekly polling, dropped to 54.3 last week, the lowest reading since December 2020. The 1.8-point decline is the largest one-week slump in the index since April 2020.  

The numbers suggest the combination of rising prices, higher rates and the war in Ukraine is starting to weigh on consumers. 

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The country’s housing market is also showing signs of a reversal. About 55 per cent of Canadians expect home prices to continue increasing, down from 59 per cent last week and as high as 64 per cent last month. Even with the decline, however, housing price expectations still remain above historical averages. 

Every week, Nanos Research surveys 250 Canadians for their views on personal finances, job security, the economy and real-estate prices. The confidence index represents a rolling four-week average of about 1,000 responses.

The index hit an all-time high last July, but has been inching lower as the initial optimism around vaccines and the reopening from COVID-19 has faded. Sentiment currently sits below historical averages.

People are particularly sour about their pocketbooks. About 39 per cent surveyed said their personal finances have worsened over the past year, near the highest since the early days of the pandemic. 

The survey data show pessimists on the economic outlook outnumber optimists by almost a three-to-one ratio: 50 per cent of respondents expecting the economy to weaken and only 18 per cent predict it will be stronger.