Consumer sentiment slid as war-driven energy costs weighed on already cautious borrowers
Canadian consumer confidence slipped to its weakest level in almost a year as the war in Iran pushed energy prices higher and reignited worries about sticky inflation.
The Bloomberg Nanos Canadian Consumer Confidence Index fell to 46.93 in the week ended April 3, with its expectations gauge dropping almost 10 points over four weeks. That's the lowest readings since May 2025, when households were still reeling from new United States tariffs.
Just 15% of Canadians expect the economy to be stronger six months out, down from 27% a month earlier, underscoring how quickly sentiment has deteriorated as the conflict enters its sixth week.
“All indicators in the Bloomberg Nanos Index showed negative pressure,” Nanos Research chief data scientist Nik Nanos said.
“The biggest drop in sentiment had to do with the proportion of Canadians who thought the economy would get stronger in the next six months.”
Confidence slide signals fragile demand
The survey also showed only 13% of respondents felt their personal finances improved over the previous year, while nearly 59% felt at least somewhat secure in their jobs and 31% expected real estate values to rise over the next six months.
The index, based on a rolling four‑week survey of about 1,000 Canadians, carried a margin of error of ±3.1 percentage points, 19 times out of 20.
For housing and mortgage professionals, the data reinforced a pattern that has already been emerging.
The market is being hit with a “double whammy,” according to Bank of Montreal (BMO) chief economist Doug Porter: potential price squeezes at the pump and a likely runup in interest rates as five-year Government of Canada yields climb.
“It’s not good. On the one side, there’s the hit to confidence because of the uncertainty for the outlook and the very real hit to people’s pocketbooks from higher gasoline prices,” he told Canadian Mortgage Professional.
“At the same time, we’ve had this backup in long-term bond yields, which is threatening to push up longer-term mortgage rates. It’s tough for the housing market on both fronts.”
Housing market and rate outlook
For mortgage borrowers, the slump in sentiment arrived just as the Bank of Canada’s latest rate decision signalled a long hold at 2.25%.
In a March statement, the Bank said that “risks to economic growth are tilted to the downside” even as energy prices surged following the war in Iran, and warned it would not allow higher oil costs to “become persistent inflation.”
Economists saw that stance as a signal to “watch rather than act” through 2026, keeping variable rates anchored while fixed mortgage pricing responded to bond yields and war‑driven volatility.
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