Consumers expect to return to pre-COVID-19 spending within a year: Bank of Canada

The Bank of Canada says Canadian household spending will eclipse earnings in the coming months as vaccinations increase and uncertainty from the pandemic recedes.

The central bank says the gap between spending and wage expectations has never been this wide in its quarterly survey of consumer expectations.

Officials at the bank suggest that gap is likely the result of households intending to spending some of the billions in savings built up during the pandemic either because they cancelled purchases, or had no place to spend the money.

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As the survey says, respondents anticipated spending more than one-third of extra savings from the pandemic over the next two years, and over one-tenth to pay down debt.

The survey released Monday morning says consumers expect their spending patterns to return to normal in about one year, with post-vaccination increases on a wide range of goods, especially travel and social activities.

Overall, 75 per cent of respondents in the survey said they planned to get vaccinated, a further five per cent said they already had a first dose, and the remaining 20 per cent either were unsure or didn’t plan to get vaccinated.