Confidence index hits nine-week high, but economic fears continue to weigh on real estate
Canadians are showing renewed optimism about the economy after Prime Minister Mark Carney secured a fourth consecutive term for the Liberal Party in office, easing months of political uncertainty and delivering a modest boost to national sentiment.
According to the latest Bloomberg Nanos Canadian Confidence Index, consumer confidence has climbed to 48.6, its highest level in nine weeks. While the reading remains below 50, it reflects an improvement from earlier in the year, when sentiment dipped sharply after US president Donald Trump’s re-election.
The bounce in confidence coincides with Carney’s election victory at the end of April, which ended a prolonged period of political instability that began in January with former Prime Minister Justin Trudeau’s resignation announcement. Around 8.6 million Canadians voted for Carney’s Liberal Party, drawn in part by his promise to “win the trade war” with the United States.
Canadians are growing more optimistic about the economy, Bloomberg reported, noting that 16% of Canadians now believe the economy will strengthen over the next six months – up from just 10% at the start of April. However, 55% still expect conditions to worsen, keeping overall sentiment in bearish territory.
Despite early signs of improved sentiment, many uncertainties remain. Carney’s first meeting with President Trump last week was described as productive, with both leaders agreeing they had “established a good basis” for further discussions. Trump said the meeting went “very well,” according to reports.
However, the US has yet to lift import tariffs on key Canadian exports, including autos, steel, and aluminum. Canada’s counter-tariffs on American goods also remain in place, continuing to put strain on trade and manufacturing sectors.
The tariffs have had a measurable impact on the Canadian economy. Unemployment rose to 6.9% in April, up from 6.6% in January, as some export-driven businesses paused hiring or scaled back operations.
According to the Bloomberg Nanos poll, 14% of respondents said they felt their jobs were not secure, while 42% reported that their financial situation had worsened over the past year.
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Housing market still under pressure
While the confidence index suggests modest national improvement, housing market sentiment remains fragile.
According to the BMO Real Financial Progress Index, 67% of prospective homebuyers say they are waiting for interest rates to decline before making a purchase. That figure is down 5% from 2024, but experts warn that rising economic concerns could further dampen homebuying activity.
“Canada’s housing market remained under pressure heading into the spring, with sales and prices both weakening further,” said Robert Kavcic, senior economist at BMO Capital Markets. “There is some clear underlying weakness as inventory builds and investors remain absent. Suffice it to say, homebuyers are losing confidence and motivation, especially in areas of BC and Southern Ontario.”
The BMO report found that concerns about a potential recession rose from 60% to 74% between March and April 2025, signalling widespread economic anxiety despite the political clarity brought by the recent federal election.
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