Although the fall season officially carries on through November, once Thanksgiving takes place and the Halloween sweets are collected, Canadians know what’s coming next — winter. But the coming cold weather is about all we are certain of right now.
Canadian opinion has evolved since mid-March. The first phase, once the coronavirus pandemic became official, was characterized by fear of the unknown and hope for a quick return to normal.
By early summer, Canadians had shifted into the second phase, where they came to grips with an uncertain future by taking steps to mitigate the present risks and by wondering what the new normal would be like.
But by late summer and into the early fall, a new phase had emerged. The depth of what we hoped would be a short-lived uncertainty is becoming clearer. We now know that there is much we won’t know for quite some time. We have started to consider the possibility that there will be no normal (new or otherwise) in the near future.
It’s this uncertainty, combined with current and future angst, that’s impacting citizen and consumer sentiment. When the public mood is down, it’s harder for businesses to connect with consumers and sell their goods and services. And it also places more pressure on governments to show concretely what they are doing to improve people’s quality of life today and their economic prospects in the future.
At Ipsos, we track this sentiment with what we call a “Disruption Barometer.”
Every month in 28 countries, we measure how people are feeling about their lot in life. In research terms, it’s an index made up of seven items that include social and economic measures, personal and country metrics, and public perspectives of today and the future. It tells us a lot about the climate in which businesses and governments are operating.
No one needs an index to know that, with rising COVID-19 cases and parts of the economy moving back into shutdown mode, people are uneasy and worried. But how does the sentiment now compare to how people felt in the spring or pre-COVID? The Disruption Barometer allows us to measure these differences.
In September 2019, just before the federal election, Canadians sat at -10 per cent on our Disruption Barometer. They felt a disconnect between the business and macro-economic progress of the country and their own household’s ability to improve their quality of life.
Many told us they were working hard just to maintain the status quo. It was this mood that led to a reshuffling of the House of Commons as Canadians voted to take away the Liberal Party’s majority.
The following months did little to lift the spirit of Canadians. They saw neither a trickledown from the positive macro-economic progress nor a substantial improvement on issues like the environment or healthcare — two issues they noted were important to them during the election. As a result, Canadians entered 2020 on a down note (-11 per cent).
By March 2020, the Disruption Barometer had started to dip on news about COVID-19, and by April it had collapsed to -24 per cent (a 13 percentage point drop). The decline in the U.S. was even greater, as it fell 27 points from +11 per cent in January to -16 per cent in March.
But the warm summer months, combined with measures to reduce risk, such as social distancing and wearing masks, gave Canadians a short-lived boost, and our views improved each month, reaching -5 per cent in July.
The summer lift was based on two things.
First, we looked to be (and felt like) we were winning the battle with COVID-19. Second, we thought we were handling the stress and strains of the pandemic much better than our neighbours to the south.
But not every metric in the Ipsos Disruption Barometer was as sunny as the season. Canadians did not see an improvement in their future economic prospects or their own financial well-being.
By August, long before the latest rise in COVID cases, Canadians had started to worry about what lay ahead, and the Disruption Barometer started to fall, bringing us to the -18 per cent we see in October.
People and businesses crave certainty and predictability. Without them, we invest less and we spend less.
People want to see progress. They want our quality of life to improve and they want the same for the generations that follow them.
Without this feeling of positive momentum, we can expect challenges to authorities and a push for change.
Our latest measurement of citizen/consumer sentiment came out of the field before the rapid rise in COVID-19 cases. A vote for a change of leadership in the U.S. on Nov. 3 might give Canadians a boost in optimism, as would a fast reduction in the spread of COVID-19 before Christmas, but these are likely to be short-lived if Canadians don’t also see more substantive improvements.
The overall score on the Disruption Barometer hides some significant and widening differences across Canada.
At the moment, the Disruption Barometer regionally ranges from a low of -26 per cent in Ontario to a high of -7 per cent in Saskatchewan and Manitoba.
All regions except Ontario have made gains since their early pandemic low watermark in April.
Other worrying splits include the difference between generations (+3 per cent for Gen Z vs -23 per cent for Boomers) and income (-40 per cent for low-income Canadians vs -6 per cent for high-income Canadians).
October’s score of -18 per cent signals a return to a tight consumer market and an unforgiving political climate as we enter the fourth quarter of 2020.
Overall, it looks like the recovery for those areas of the economy that are dependent on positive consumer sentiment will be on a longer road than we hoped. If we see a K-shaped recovery, we are also likely to see increased tensions between segments of the population based on age, income, sector of employment, region, homeownership, etc.
Finally, the politics of the pandemic will no longer be marked by unquestioned, majority support for governments to act as they see fit to tackle the crisis.
Instead, we will see government actions increasingly challenged, and people will take positions based on their economic and community interests.
Bundle up, there is a chill in the air.
Mike Colledge is president, Canada Ipsos Public Affairs.
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