- 81 per cent of Canadians are concerned a recession is on the
horizon this year and three quarters (75 per cent) report that
their concerns about inflation have increased in the last three
months
- Nearly 8 in 10 adults are making lifestyle changes due to
recession concerns
TORONTO, Sept. 28,
2022 /CNW/ - This quarter's BMO Real Financial
Progress Index results found that Canadians are growing
increasingly concerned about a recession, inflation, and rising
consumer costs. 81 per cent of Canadians said they are concerned
about a recession occurring by the end of the year, and over the
past three months three quarters (75 per cent) said their concerns
about inflation have increased. More than 75 per cent of Canadians
feel their financial momentum is threatened by higher grocery bills
(81 per cent) and rising cost of gas (76 per cent).
Concerns vary significantly by generation. Older Canadians
report feeling more concerned than younger generations. Between
ages 45-64, 79 per cent said their concerns about inflation have
increased over the last three months compared to 66 per cent of
those between aged 18-24 and 73 per cent of those aged 25-34.
In response to the rising cost of living, 77 per cent of
Canadians said they are making lifestyle changes such as delaying
large purchases (34 per cent), paying down debt (30 per cent), and
cutting back on holiday spending (27 per cent).
"As the cost of living and everyday essentials rise and a
possible impending recession on the way, it's understandable that
Canadians' concerns are also increasing," said Gayle Ramsay, Head, Everyday Banking, Segments
& Customer Growth, Personal Banking, BMO. "It's important, now
more than ever, to look at your finances, develop a budget and
actively manage your cashflow to avoid unplanned expenses. A BMO
financial advisor can help customers put a plan in place that suits
their unique needs to navigate uncertain economic times and
continue to make real financial progress."
Compared to this time last year, significantly fewer Canadian
adults are confident that they are making financial progress (down
four points to 34 per cent). The drop in confidence since this time
last year is particularly sharp in Vancouver where confidence dropped 10 points
to only 14 per cent, saying they feel confident about their
financial situation. In Toronto,
confidence has dropped 5 points to 37 per cent and Montreal remains the same at 43 per cent.
However, nearly three-in-four Canadians (72 per cent) think they
have enough savings for an emergency, an improvement compared to
both last quarter (67 per cent) and last year (68 per cent).
"Fears of a recession could become self-fulfilling, so Canadian
households need to be prepared, especially if interest rates
continue to rise to tame inflation," added Sal Guatieri,
Senior Economist, BMO.
Best practices to help Canadians manage through inflationary
periods and economic downturns
Most Canadians understand the importance of having a budget,
however, there is room for improvement as the Index revealed 25 per
cent of Canadians do not track their financial progress. The number
is highest among those aged 45-54, at 31 per cent.
BMO offers the following tips to help Canadians continue to
make financial progress:
- Utilize digital banking tools and apps to help track
spending patterns: About half of Canadians (48 per cent) said
mobile banking tools have helped them make financial progress.
BMO's mobile banking app features digital capabilities focused on
helping our customers make real financial progress, including
Savings Goals, Pre-authorized Payment Manager, BMO Insights, and
BMO CashTrack.
- Talk to a financial advisor who can help you review and
adjust your budget to account for rising costs and help save for an
emergency. An expert can help ensure your savings and spending
goals are still on track or develop a savings and retirement
plan.
- Postpone big-ticket purchases, such as appliances or
cars. Some price increases may be temporary, in which case it may
be worthwhile to wait.
- Review monthly payments, such insurance bills and
monthly subscriptions to ensure you are getting the most for your
money.
These findings are from the latest BMO Real Financial
Progress Index, a quarterly survey conducted by BMO and Ipsos
that measures Canadians' sentiment around financial confidence. The
survey was conducted from July 27 to August
29, 2022.
To find out how BMO can help customers make financial progress,
visit: www.bmo.com/personal
About the BMO Real Financial
Progress Index
Online research was conducted in both US and Canada from July 27 to
August 29, 2022. A sample of n=3,402 adults ages 18+ in the
US (including n=300 oversamples in Chicago, Indianapolis, and Milwaukee), and a sample of n=3,404 adults
ages 18+ in Canada (including
n=300 oversamples in Montreal and
Vancouver, and n=302 in
Toronto) were collected.
About BMO
Serving customers for 200 years and counting, BMO is a highly
diversified financial services provider - the 8th largest
bank, by assets, in North America. With total assets
of $1.07 trillion as of July 31, 2022, and a team of
diverse and highly engaged employees, BMO provides a broad range of
personal and commercial banking, wealth management and investment
banking products and services to more than 12 million customers and
conducts business through three operating groups: Personal and
Commercial Banking, BMO Wealth Management and BMO Capital
Markets.
SOURCE BMO Financial Group