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Canadian consumers less confident in nation's economic outlook

Feb 16, 2012 Phil Burgess

Although Canada emerged relatively healthy from the global recession, sentiment among the nation's consumers appears to be waning, reflecting debt crises in Europe and mounting uncertainty in the U.S. According to a survey released this week by the Royal Bank of Canada, less than one-third of Canadians feel optimistic about the country's economic prospects over the next year. That figure is down from 43 percent a year ago and 56 percent in 2010. The study also showed declining expectations of respondents' individual financial circumstances. High debt levels, particularly in regards to student loans, may also be contributing to the dour mood, driving many lenders to adopt more stringent background checks and credit reports. "They're feeling less confident about the economy, jobs prospects and disposable income growth, and they're feeling a little bit nervous about managing their debt," David McKay, Royal Bank's group head of Canadian Banking, told Dow Jones Newswires. "Canadians are attempting to pay down that debt, particularly on the credit card side." However, a string of good news in the U.S., particularly regarding employment, spending and factory activity, may help boost trade between the two nations and drive up economic growth.