While February saw Canadians rebound from a slightly negative assessment of the present state of the economy, their outlook for the future continues to decline, suggest the January findings from TNS Canadian Facts’ Consumer Confidence Index.

The Present Situation Index, which captures evaluations of the overall state of the economy and the employment situation, now stands at 118.7 (up from 114.7 in January but still below the 122.8 high point recorded last fall). Confidence bounced back from a drop in January when consumers were reacting to volatility in equity markets and recessionary talk in the U.S.

“Although consumers in Canada have regained some of their short-term confidence, the continued decline in expectations for the future continues to be an area of concern,” said Richard Jenkins, vice-president of TNS Canadian Facts and director of the marketing research firm’s monthly tracking study.

The Expectations Index, which measures consumers’ estimation of the economy, household income and employment in six months, declined for the third consecutive month. The January index value is 97.9 (down from 98.5 in January and 100.4 in December). Not since the fall of 2005, when Hurricane Katrina sent economic confidence plunging, has the Expectations Index been this low.

The Buy Index, which gauges the degree to which people think the current period is a good time to make major purchases, also declined. The index now sits at 93.0 (down from 94.3 last month).

“With the possibility of an election on the horizon, Canadians have become much more concerned about the continuation of the prosperity they have enjoyed over the past several years,” added Jenkins.

TNS tracks Canadians’ attitudes about the economy each month as part of a global study conducted by in 18 countries. Three indices are produced each month to show how confidence in the economy is changing: Present Situation Index; an Expectations Index; and a Buy Index. The Canadian fieldwork is conducted using the firm’s national bi-weekly telephone omnibus service, TNS Express Telephone. A total of 1,015 nationally representative Canadian adults were interviewed between February 4 and 8.