Canadian consumer and business confidence improved last month compared to previous surveys, according to the latest Conference Board indices.

Consumer confidence gained 8 points in January, raising the Index to 124.5, its highest level since last spring. Meanwhile, business confidence climbed 20 points in the Winter 2006 survey to levels not seen since the third quarter of 2004. Both consumer and business confidence declined sharply last fall after energy prices soared following Hurricanes Katrina and Rita — consumer optimism dropped to its lowest level in four years and business confidence dipped to a two-year low.

“Consumers are feeling confident about the state of their family’s finances and job prospects, and their appetite for big-ticket spending has returned. Business leaders are also more optimistic about their financial performance,” says Pedro Antunes, director of economicfForecasting. “These results indicate that consumer spending and business investment will continue to support solid overall growth in the economy.”

The Conference Board’s latest Canadian Outlook forecasts the economy to grow by 3% in 2006. Real consumer spending is also expected to increase by 3% this year.

Consumer confidence was up in every region of the country except Atlantic Canada, which recorded a loss of four points.

The consumer confidence survey of Canadian households was conducted between January 12 and January 17. The business confidence survey was conducted in the first two weeks of January.