Dec 23, 2022
81% of Canadians are worried about a recession in 2023: survey
Recession will be the base case scenario for investors in 2023: Strategist
A recent Leger survey, conducted on behalf of BNN Bloomberg and RATESDOTCA, studied Canadians’ general attitudes toward an oncoming downturn and found that 81 per cent are worried about the possibility of a recession — and more than half are actively preparing for one.
According to the survey results, 56 per cent of respondents are preparing for a recession in some way. In order to do that, 38 per cent are cutting down their expenditures.
Other ways respondents say they’re preparing for a recession include paying down debt (18 per cent), keeping their savings liquid instead of in investments (14 per cent), and asking for a raise or taking on more work (six per cent).
Given rising interest rates, homeowners are more likely to adopt these methods (61 per cent) versus the 48 per cent who do not currently own a home.
On the other hand, 39 per cent say they are not preparing for a recession, with 22 per cent believing that there is nothing they can do to prepare. Whereas others don’t feel the need to prepare (seven per cent) or haven’t thought about it (10 per cent). Notably, those with an annual income of at least $60,000 are also more likely to prepare (63 per cent) as compared to only 47 per cent of those who earn less than $60,000.
Homeowners with one or multiple homes are more likely to be worried (84 per cent) as opposed to those who rent (80 per cent) — and for good reason. With increasing interest rates, many Canadians with variable-rate mortgages are starting to reach their trigger rate, where their regular mortgage payment no longer covers the interest owed. In fact, some lenders are starting to see an increase in mortgage defaults and foreclosures as more Canadians struggle to keep up with higher mortgage payments.
Six-in-10, or 60 per cent, of Canadians own at least one home, while two per cent own more than one home. Those aged 35 plus, those living in suburban or rural areas, and those with a household income of more than $60,000 are more likely to be homeowners.
Renters, on the other hand, tend to skew younger (18 to 34 years old), live in urban areas, and have a household income of less than $100,000.
Those older than 55 are less likely to be worried about the recession (25 per cent) compared to those in the age group of 18 to 34 and younger, who state that they are very worried about the recession (28 per cent).
Although most Canadians are worried about an oncoming recession, 22 per cent are optimistic that the economy will recover in one or two years. Those older than 55 with a household income of more than $60,000 anticipate an even quicker recovery. This may be indicative of greater confidence in their savings that will help tide them over through a recession.
Meanwhile, 35 per cent of respondents anticipate economic recovery within three to five years. And just more than 20 per cent expect the recovery to take longer – five to 10 years — particularly those with a household income of less than $60,000, while seven per cent don’t expect the economy to recover at all.
BNN Bloomberg has teamed up with RATESDOTCA to take the pulse of Canadians every month on key pocketbook issues as we strive to better understand how households are navigating COVID-19. This is the latest instalment in monthly special coverage.
An online survey of 1,526 Canadians (older than 18 years) was completed between December 9 and 12, 2022, using Leger’s online panel. No margin of error can be associated with a non-probability sample (i.e., a web panel in this case). For comparative purposes, though, a probability sample of 1,526 respondents would have a margin of error of ±2.5%, 19 times out of 20.