Consumer Confidence Hits Eight Year Low in UK
April 1 2003
The Consumer Confidence Index figure in the UK as carried out by Martin Hamblin GfK on behalf of the European Commission continued to fall during March, registering a score of -10. The latest drop of one point, following a large fall in February, brings the overall Index score to the lowest level since December 1995.
There has been minimal movement across each of the 5 key measures during February. Both of the personal finance measures have dropped slightly along with expectations for the future of the general economic situation, however, perception of the development of the general economy and the current purchase climate has improved slightly. Interviews for the March barometer were conducted between the 27th February and the 18th March prior to the commencement of military action in Iraq.
The main points of the March barometer include:
Perceptions of the development of personal finances over the last 12 months have decreased by 1 point in March, registering a score of +1. This score is down 3 points from that attained this time last year and is the lowest seen since November 2000.
Expectations for the future of personal finances have fallen by 2 points during February and currently stand at +7. March's result is also down 6 points year on year and is the lowest seen since October 2001.
Perceptions of the development of the general economic situation rose slightly during March. The measure currently registers a score of -36, having moved up 1 point from last month's score of -37. Despite this small increase, 60% of the sample still believe that the general economic situation has worsened over the past 12 months. This month's measure is also down 18 points from the score attained this time last year.
Expectations for the future of the general economic situation fell by 1 point in March and currently register a score of -34. Overall, 55% of those questioned believe that the general economic situation will worsen over the next 12 months (compared to 33% this time last year). March's score is the lowest seen since September 1990 during the build-up to the first Gulf War (when a score of -34 was also recorded).
Perceptions of the benefits of making major purchases in the current climate have increased by 1 point in March. This measure currently registers a score of +13 with only 32% of consumers believing that now is the right time to make major purchases. The measure is down 10 points year on year.
The measure relating to the perception of the current savings climate has fallen again during March and currently stands at -16. The month's decrease of 5 points has taken this measure to a new all time low. Overall, 55% of sample believe it to be an unfavourable time to save. March has also seen a reduction in the number of consumers intending on saving money over the next 12 months. The measure has dropped four points and currently stands at -3. This is the lowest level seen since September 2000 (when a score of -6 was recorded). Overall, 48% of consumers think that it is unlikely that they will be able to save money over the next year.
The measure monitoring the expectations for the cost of living over the next twelve months has risen by six points to register a score of +84. An increase in this particular measure denotes that a higher number of consumers anticipate that there will be a more rapid increase in prices over the next 12 months. During March 30% of those questioned revealed that they expect there to be a more rapid increase in prices over the next 12 months. Moreover, this month's score of +84 is the highest level seen since June 2001, where a score of +84 was also recorded. The last time the score went above this level was in August 1998.
The survey was conducted amongst a sample of 2001 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 27th February - 18th March 2003.
All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.
