Conflicting signals from confidence data


Two sets of confidence data in the past week show a largely pessimistic consumer, albeit one who believes it to be an opportune time to spend.


Nationwide CCI at lowest level since March 2009


In last Friday’s Nationwide November survey the headline CCI slumped 11 points to –47, the lowest since March 2009 in the midst of recession. Such a level suggests that the threat of a double dip recession remains a possibility. All sub-indices fell, with the greatest drop in the Expectations Index, down 15 points to 63, the lowest also since March 2009. Both expected job losses and income expectations have worsened considerably in the past six months. Spending confidence, measured in terms of whether people believe it is a good time to make major purchases, tumbled 12 points to 80, the lowest level since November 2008. Fewer people believe it to be a good time to buy a house or car – 22% compared to 37% a year ago.


Unchanged GfK measure in December – boosted by surge in spending climate measure


This week’s December headline CCB released by GfK NOP is unchanged at –21 on the month, and in the zone that points to weak / no growth in GDP. Of the five component measures, only the spending climate measure gained – up 10 points to –7 - its highest level since November 2007. This measure, which gauges consumers’ perception of the climate for making purchases of major household goods, is likely to reflect it being a good time to make purchases before prices increase with the rise in VAT in the New Year.


But consumers are in pessimistic mood


More people are feeling worse off than a year ago (36% compared to 34% in 2009) with only 21% of people expecting their financial position to improve in the next 12 months (28%, a year ago). Only a small proportion of people feel the economy has improved in the past year (11%, up from 8% a year ago), with fewer expecting the economy to get better (28% v 38%, a year ago).


Inflation and unemployment worries are behind the current pessimistic mood, with consumer prices expected to rise 9.6% in the next 12 months and 73% of people expecting the number of unemployed people to rise in the next year (unchanged on a year ago).


With more people likely to consider spending to beat VAT increases, savings confidence fell in December. Stretched household finances are resulting in fewer households currently saving (43%) compared to an average of 45 % in the past 6 months.


And like the current weather pattern no shift in consumers’ mood in prospect


A continuing spell of prolonged adverse weather may shift spending patterns as many people have to switch between categories or bring forward intended purchases. The outlook into the New Year is set for the economy to continue at low or no growth levels with little sign of an upturn in consumers’ pessimistic mood. This year’s 12-month GfK confidence measure of –18, is up 7 points on 2009 and the highest since 2007. A year from now it seems unlikely that the recovery in confidence in 2010 will be repeated.




The JGFR Consumer Confidence Monitor is produced monthly and is based on GfK* and Nationwide** data. A high earners version is also available. Regional and socio-demographic analysis of the mood of the consumer can also be undertaken.


*A monthly survey undertaken among around 2,000 adults aged 16+ representative of the UK population and undertaken by telephone. IGfKNOP undertake the survey on behalf of the European Commission. The December survey was conducted between 3-10 December among 2,007 adults aged 16+.


** Nationwide’s CCI is based on a monthly survey representative of the UK population among 1,000 people. The November survey was undertaken by TNS-RI for Nationwide between 18 October to 21 November


To order your trial Consumer Confidence Monitor contact or ring +44 208 944 7510 or +44 7740027968