Consumer confidence wanes on gas-price hikes

Canadian consumer confidence stumbled in May, when gasoline prices shot to record highs, the Conference Board said Monday.

The Ottawa-based research group said its consumer confidence index fell seven points to 85.8 in May, the lowest level since the Conference Board of Canadasaid it switched to a monthly survey in December 2001.

Consumer optimism weakened in every part of the country,with Central and Eastern Canada showing the biggest declines.

"Part of the reason behind the drop in consumer confidence could be the rise in gasoline prices observed over the past month," the Conference Board said.

The last time consumer confidence fell significantly was in the fall of 2005, when hurricane Katrina sent gasoline prices soaring.

The May confidence survey was taken between May 1 and May 7. Gasoline prices continued to climbduring the month as the cost of a barrel of oil rose to a peak of $135.09 US.

The confidence index is based on consumers' responses to questions about their:

• Outlook for their current situation.
• Future situation.
• Opinion of the future job market.
• Outlook on making a major purchase.

The Conference Board said the percentage of respondents who said right now is a good time for an average person to make a major purchase fell by 7.6 percentage points to 38.2 per cent.

The details in the Conference Board report mirror the results of a poll released last week by Harris Decima Investors Group thatsaidconsumer sentiment in Canada hit its lowest level since September 2001.