Preeper’s Blog

Economic confidence continues its gradual decline in Nova Scotia

The Thinkwell Research Economic Confidence Index (ECI) hit a new low in May, slipping to -32. This is slightly lower than the previous low of -30 set in March.

Following the economic downturn in the fall of 2008, economic confidence in the province was stable and positive throughout most of 2009.  However, after months passed with little or no sign of a significant rebound in growth, the ECI dove back down beginning in early 2010.   This trend has continued into 2011 (see below).

Thinkwell Research Economic Confidence Index (NS)

Note: inflection points indicate when data was collected during the time period shown on the x-axis.

Negative perceptions of Nova Scotia’s economic future were principally responsible for the strong decline in the index in 2010, but the gradual decline thereafter has been driven largely by perceptions of the current state of the economy.

Also, during the past six months, consumers have maintained their view that Nova Scotia is either still in a recession (December 2010, 42%; May 2011, 37%) or recovering from one (46%; 47%).  Very few in this period say they believe the recession is fully over (7%; 10%).

Job Security

We also asked employed Nova Scotians to tell us whether their employer is adding or reducing staff. The measure is designed to give us a broad sense of trends in the employment picture in the province.

Since March, there has been a 10-percentage point drop in the number who say that there are no changes planned in the size of the workforce of their company (March 2011: 57%; May 2011: 47%), and increases in the proportion who say that their employer is either hiring new people (March: 24%; May: 27%) or laying people off (March: 17%; May: 22%).

These results are from an omnibus survey conducted by telephone with a random, representative sample of 405 adult (18+) Nova Scotians between May 4 and 11, 2011. A sample of this size is expected to yield a margin of error of plus or minus 4.9 percentage points, 19 times out of 20.

A sizable minority of Nova Scotians are planning to take advantage of the strong Canadian dollar to travel to the US and make purchases from US companies.

With the Canadian dollar at or above parity with the US dollar, what kind of impact will this have on consumer shopping patterns in the province?  What is the likelihood that Nova Scotians will use this increased purchasing power to travel to the US for shopping and vacations, or make purchases from US companies online or by phone?

The results of our most recent survey suggest that a number of Nova Scotians plan to take advantage of the exchange rate in the not too distant future. Over the next 6 months:

• more than one third of Nova Scotians say they are either somewhat (23%) or very (11%) likely to purchase goods online or over the phone from US companies due to the increase in the value of the Canadian dollar;
• one-third say they are somewhat (12%) or very (21%) likely to travel to the US for entertainment, pleasure or vacation; and
• one in four say they are somewhat (10%) or very (15%) likely to travel to the US for shopping.

Close to one in ten say they are somewhat (5%) or very likely (3%) to make large purchases from US companies such as furniture, appliances or automobiles resulting from the increased value of the Canadian currency.

Nova Scotians between the ages of 35 and 54 and those with annual household incomes of $60,000 or more are most likely to travel to the US, while those 18 to 34 are most likely to make purchases online or by phone.

These results are from an omnibus survey conducted by telephone with a random, representative sample of 405 adult (18+) Nova Scotians between May 4 and 11, 2011. A sample of this size is expected to yield a margin of error of plus or minus 4.9 percentage points, 19 times out of 20.

Note: this is the first in a series of public opinion updates we will be providing, based on the results of our most recent omnibus survey.

Concerns about the economy are not limited to members of the general public. Many of the people who responded to our offer to suggest questions wanted to know how Nova Scotians feel about our long-term economic future. The sub-text seemed to be a suspicion that Nova Scotians do not understand how daunting these long-term demographic, economic, and fiscal challenges actually are.

To test this hypothesis, we asked Nova Scotians to assess the likelihood of several extreme scenarios materializing within the next 25 years. In descending order of probability (on a scale of 1 to 10), Nova Scotians responded as follows:

Electricity prices more than double due to significantly higher oil and coal prices – 6.7 out of 10 (with 18% rating it a “10”)

The Department of Health budget rises from 40% to 75% of the total provincial budget, and the province drastically reduces services offered in other departments such as Transportation, Education, Environment and Community Services - 5.5 out of 10 (with 8% rating it a “10”)

Over 25% of the rural towns across Nova Scotia no longer exist because of a sharp decline in population and the complete collapse of their local economies – 5.3 out of 10 (with 10% rating it a “10”)

Nova Scotia’s debt rises to unmanageable levels forcing the government to double the personal income tax – 5.0 out of 10 (with 8% rating it a 10)

The provincial economy declines sharply and Nova Scotia becomes the poorest province in Canada – 4.5 out of 10 (with 8% rating it a “10”)

Nova Scotia loses 40% of its population and becomes smaller than every other province, except PEI – 4.2 out of 10 (with 7% rating it a “10”)

Again, all of these scenarios are extreme. None of them may actually happen. What we are interested in is the gap between how people respond to each of the questions. That tells us which of these “big picture” issues are registering as areas of concern for the general public (and not just policy makers and “elites”).

The results suggest that the public may not be fully cognizant of the province’s longer term economic and demographic challenge: a long-term, structural economic decline and a steep population decrease are considered the least likely of the scenarios we tested.

On the other hand, concerns about the rising costs of health care and the economic viability of some rural communities are not new. Although Nova Scotians may not be willing to accept how severe these problems could become, the fact that they are more likely to accept these outcomes than some of the others is perfectly understandable.

Finally, the fact that Nova Scotians would be most willing to accept the possibility that electricity prices could double is not surprising. They have experienced spikes in energy prices in recent years, and predictions of dramatic increases in the price of energy (particularly oil) are not uncommon. In fact, they’ve been around for decades.

These results are from an omnibus survey conducted by telephone with a random, representative sample of 402 adult (18+) Nova Scotians between August 4 and 11, 2010. A sample of this size is expected to yield a margin of error of plus or minus 4.9 percentage points, 19 times out of 20.

Note: this is the first in a series of public opinion updates we will be providing, based on the results of our most recent omnibus survey.

For the first time, we asked Nova Scotians if they believed the recession was over in Nova Scotia. Although only 11% believe that this is the case, a majority (53%) believe that Nova Scotia is starting to recover. Three in ten (31%), however, believe that the recession has yet to end. Opinions do not vary significantly on a regional basis. As is usually the case with questions about economic confidence, those with lower household incomes are the least positive.

These results are from an omnibus survey conducted by telephone with a random, representative sample of 402 adult (18+) Nova Scotians between August 4 and 11, 2010. A sample of this size is expected to yield a margin of error of plus or minus 4.9 percentage points, 19 times out of 20.

Note: this is the first in a series of public opinion updates we will be providing, based on the results of our most recent omnibus survey.

Economic confidence in Nova Scotia has hit its lowest level since we started tracking this set of questions in July 2009.  This is the second survey in a row in which a new low was reached. In the previous wave, declining optimism about how well the provincial economy will perform over the next 6 months was the main driver of the drop in the index. In this survey, all of the metrics (current state of the economy, future prospects for the economy, current personal financial situation, and the outlook for the local real estate market) dropped by comparable amounts.

Economic issues continue to top the list of concerns with a total of 34% (unchanged), followed by health care at 22% (up 4). Taxes - which spiked in our June survey just prior to the increase in the harmonized sales tax - is stable at 8% in this survey (down 1).

At the same time, the latest wave of issue tracking from Nanos Research (our national partner) indicates that health care has surged another twelve points in the past quarter as the most important national issue of concern among Canadians, while there was no change in the perceived importance of jobs/economy, high taxes and education. Health care was identified by 35% of Canadians as the top issue, followed by jobs and the economy at 19%.

These results are from an omnibus survey conducted by telephone with a random, representative sample of 402 adult (18+) Nova Scotians between August 4 and 11, 2010. A sample of this size is expected to yield a margin of error of plus or minus 4.9 percentage points, 19 times out of 20.

An interesting reponse to the increasing consumer interest in knowing where their food comes from.

Sourcing The Milk You Drink - Forbes.com.

I am pleased to announce that I will be appearing on the Nanos Report on CPAC this Sunday, October 25. The show will air at both 11:30 AM and 9:00 PM Atlantic Time. I’ll be part of a Pollster Panel with Nik Nanos and Barb Justason of Justason Marketing Intelligence. The idea behind the segment is to bring together independent pollsters from across the country to discuss what’s hot in their respective regions. I’ll be providing the Atlantic Canadian perspective.

I am thrilled to announce that our first podcast is now available for download. This the first of a regular series of podcasts we will be making available on our site.

We took advantage of some downtime between our Halifax Club event and a reception on Tuesday to record an interview with Nik Nanos (and me) about a number of trends in public opinion on a local and national level. Hope you enjoy it.

Just a quick note of thanks to Nik Nanos for taking time out of his busy schedule to join me in presenting some “numbers” at the Halifax Club yesterday.  It was a lot of fun. The event was a sellout, and the feedback we received has been extremely positive and encouraging.

I also want to thank the members of the Thinkwell and Think Usability teams for their assistance in pulling the event together, the Halifax Club for hosting the session, and Eleanor Beaton for the lovely introductions.

A special thank you as well to all of the attendees. It was great to see so many familiar faces, and a lot of new ones too.

Thanks again.

I’m excited to announce that I’ll be joining Nik Nanos of Nanos Research at a speaking event later this month.

The event will showcase some recent polling data our two firms have collected. The event will take place on Tuesday, September 29^th, at 12 PM at the Halifax Club.

Details of the event are on page 4 of the Club’s September newsletter (link below). You can reserve your seat through the club directly.  Seating is limited, so don’t delay if you are interested in attending.

http://www.halifaxclub.ns.ca/file/09%20September%202009(5).pdf

Looking forward to seeing you there.