The Commerce Times

A skeptically hopeful nation

Canadians are slowly becoming more optimistic about their country’s economic recovery, according to a poll released at the Economic Club of Toronto’s annual economic outlook.

More than a half of Canadians surveyed expect the economy to improve in 2010, according to the public opinion research firm POLL ARA. Last year, only two in ten respondents said 2009 would bring better economic times.

The figures highlight a renewed sense of optimism, with many saying they were unaffected by the crisis. Despite the increase in confidence, more than a half of Canadians still believe the country is in a recession. The change in sentiment marks a stark reversal from only a year ago when the same poll was conducted. Then, it showed that consumer confidence had plummeted to historically low levels.

Michael Marzolini, chairman of POLLARA, said Canadians “reacted decisively in the face of the recession. They were shaken but not stirred.”

Another 43 per cent of Canadians believe the employment situation will improve, compared to 12 per cent a year ago. Seventeen per cent of Canadians believe the economy is also in a period of moderate growth, compared to six per cent last year.

“In the Canadian spirit that spring is just around the corner, it shows Canadians’ belief that we are emerging from the crisis with better days ahead,” said Mark Adler, president of the Economic Club of Canada. Canada’s top economists, however, cautioned against becoming too enthusiastic, citing inflation, high unemployment and the growing federal deficit as potential factors that could derail a steady recovery.

Historically, developed markets such as Canada and the United States have recovered quickly after a recession. Not this time around, say the economists. European countries and Japan are expected to experience even slower growth.

“We’re on the road to recovery but that road is not taking us back to where we began,” said Warren Jestin, Chief Economist at Scotiabank.

However, the economists all agreed that the worst of the recession has passed. “The Canadian economy was cyclically challenged but fundamentally sound,” said Craig Wright, Chief Economist at RBC Capital Markets.

Going forward, the economists expect rapid growth in emerging markets such as China, India, Chile and Brazil. Wright said growth in emerging markets will also bring an increased financial market volatility, forcing developed markets to adopt more highly skilled, niche-oriented businesses.

“The talent in India, Mexico and China is completely untapped. Canadians need to increase their skills if they want to compete in a world-class arena,” he said.

The poll results were collected from 4,263 respondents, with a margin of error of 11/2 per cent.