Canada's Condominium Magazine
Economists differ in their forecasts for 2013, but Canadians feel positive about their own financial future, according to CIBC. Most of us are more optimistic about the future than we were a year ago.
A person who admires the passing scenery as the ship sinks beneath him is either an incorrigible optimist or an idiot. CIBC says that as of now, most Canadians are feeling positive about their financial situation. More so than at this time last year, the results of a Harris/Decima poll reveal. And we are more confident about achieving our future financial goals. So as we come to the end of 2012 and prepare to enter the uncharted waters of 2013, are we being optimists or idiots?
A look around at the financial headlines reveals outright contradictions among the economic experts, some expressing a guarded kind of optimism for the coming year, while others are more gloomy.
It won’t be a “stellar” year, according to economists cited in a Toronto Star piece on the economy: GDP growth will be slight, personal indebtedness continues to be a problem for individual Canadians, the housing market has been in a downward trend that is forecast to continue, and the job market could “soften.”
The much-ballyhooed fiscal cliff in the US is still there, and experts warn of the direst consequences if that country falls off it. Europe continues to be a worry, too, with the Eurozone back in recession, even if that recession is “slight” according to Desjardins economic analysts. Still, reduced global demand for our products affects Canada’s exports, and that affects GDP, especially in Ontario.
But RBC sees those risks to the global economy “easing” in 2013, with gradual improvement following, and this bank actually sees Canada’s GDP increasing next year.
“We expect that factors weighing on growth in late 2012 and early 2013 will reverse course, which, alongside accommodative financial conditions and low household borrowing rates, will set the stage for better economic growth,” said Craig Wright senior vice-president and chief economist, RBC.
And RBC notes that the pace of personal debt accumulation has been slowing, which is “a step in the right direction.”
So there is no agreement about the future among the experts.
But those Canadians who responded to the CIBC poll, the ones who feel more positive about their financial future? What do they know that the experts do not? They cross all age groups and all regions of the country. In fact, Ontario residents, with 74 per cent expressing optimism, are among the most positive. And older Canadians (55–64), who might be forgiven for feeling less optimistic, are actually more confident that they will meet their financial goals than they were a year ago (75 per cent vs 68 per cent).
It turns out that CIBC has an ulterior motive in talking about this: they want their customers to use their financial advisor services. A big reason why people tend to feel more confident and positive about their financial future is that they talk to a financial advisor, and that conversation helps them understand better where they stand today, where they want to be in the future, and what steps they need to take to get there.
Nevertheless, it’s refreshing to know that a majority of Canadians, in spite of all the gloomy and alarmist reports in the media, are able to conclude that things really aren’t so bad.