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The Globe and Mail

INDICATORS SAY RECOVERY, BUT CANADIANS STAY CAUTIOUS

Gross domestic product numbers may now be on the rise, but that doesn't mean individual Canadians feel any better about their personal prospects.

A survey of 1,500 Canadians by research firm Gandalf Group and advertising firm Bensimon Byrne shows that consumer confidence has hardly budged, even as economic data and stock market indexes show dramatic signs of improvement.

Just under half of those surveyed at the end of November said they think the economy is actually growing now - pretty much the same percentage that felt that way in July.

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And well over half of the Canadians polled say they are worse off than they were a year ago.

The message, says Gandalf principal David Herle, is that consumers don't feel more confident than they did a year ago, despite indicators that say the economy is improving.

Canadians have enormous amounts of personal debt, and until they can pay some of that off "there is not a consumer spending rebound in the offing," he said. "They are not going to spend money on the basis of a GDP number."

The high level of unemployment has created a sense of financial unease, even for those who still have their jobs, Mr. Herle said.

"People have been trying to prop up their standards of living through debt. As long as their investments were going great or their house was doubling in value that all seemed plausible, but [they now]see it is unsustainable."

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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