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No New Year Cheer Here
Overall, the Consumer Confidence Index figure as reported by Martin Hamblin GfK in the UK on behalf of the European Commission has risen by 1 point in January and currently stands at -3.
This comes after a dramatic drop of 6 points recorded last month. Two of the key five measures have increased, in particular the measure relating to the benefits of making purchases at the present time. This increase is not unexpected, as we typically see an improvement at this time of year (as a result of the January sales). The major purchase intention measure has been the main contributor to the overall increase in the Index score this month. Future expectations for personal finances have also increased slightly, however both general economy measures have fallen - in particular that measuring confidence in the general economy over the next 12 months.
Whilst this month's Index increase of 1 point reflects an increase in confidence, historically, it would be expected to see a more marked improvement at this particular time of year.
Perceptions of the development of personal finances over the last 12 months have decreased by 1 point this month, registering a score of +4. This score is down 1 point on that attained this time last year.
Expectations for the future of personal finances have risen by 1 point during January and currently stand at +12. This month's result is also down 3 points year on year.
Perceptions of the development of the general economic situation have dropped by 1 point this month and currently register a score of --29. In total, 53% of those questioned believe that the general economic situation has worsened over the past 12 months. This is the lowest score seen since October 1995, when the measure also stood at -29. The last time the measure fell beneath this level was in July 1995. The measure is down 18 points year on year.
Expectations for the future of the general economic situation have fallen considerably this month. The measure currently registers a score of -28, having dropped by 6 points from this time last month. This is the lowest score seen since October 2001 (when a score of -33 was recorded) following the events of September 11th. Over the past 2 months this measure has dropped a total of 18 points and as it stands 50% of those questioned believe that the general economic situation will worsen over the next 12 months. The measure is also down 23 points from this time last year.
It is believed that the drop in the value of shares and the increasing likelihood of a Gulf war has continued to add gloom to the situation.
Perceptions of the benefits of making major purchases in the current climate have increased by 10 points in January. This measure currently registers a score of +25. This is the highest score achieved since September 2002 (when a score of +25 was also recorded). Despite this month's increase, the measure is down 3 points year on year.
The measure relating to spending intentions over the next 12 months has fallen by 2 points this month and currently registers a score of -9. This is the lowest score seen for this particular measure since December 1998 when a score of -11 was recorded.
Overall 35% of those questioned anticipate that they will be spending less on major purchases over the next 12 months compared with what they spent over the last 12 months.
The survey was conducted amongst a sample of 2004 individuals aged 16+. Quotas were imposed on age, sex, region, social class and income to ensure the final sample was representative of the UK population. Interviewing was conducted from 9th - 21st January 2003.
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