Daily Research News Online no. 2393 - UK Consumer confidence shows 'Baghdad Bounce'

UK Consumer confidence shows 'Baghdad Bounce'

June 3 2003

The Consumer Confidence Index figure has returned to levels seen at the beginning of 2003, according to Research carried out in the UK by Martin Hamblin GfK on behalf of the European Commission. Perceptions of the general economy and personal household situation in the last 12 months remain low, but future expectations continue to improve, now that the Iraq war has concluded. Purchase intentions and preparedness to save have also risen.

The general population still feels negative about the way their finances have gone over the last year but are becoming more optimistic about the future. Perceptions of the former have decreased by 7 points this month to -4, the lowest score seen since November 2000, whereas expectations for the future of personal finances have increased by 2 points during May and currently stand at +11. Comparing expectations with perceptions of the last 12 months over time suggests that consumers have been consistently over-optimistic about their situation.

Over half of the sample (54%) believe that the general economic situation has worsened over the past 12 months. This month's measure is also down 20 points from the score attained this time last year. However, expectations for the future of the general economic situation have shown considerable improvement this month, as last.

Other key scores from the research are as follows:

Perceptions of the benefits of making major purchases in the current climate have shown a marked improvement, increasing from +12 last month to +17 in May. This is good news for retailers. However, the measure is still down 6 points year on year.
Consumers are happier about the climate for saving. This measure has increased dramatically in May from -16 in April to +3, an increase of 19 points. Half of all respondents believe it to be a good time to save.
The number of respondents intending to save money over the next 12 months has improved, reflected in the increase of 12 points from -4 to +8. Overall, 56% of consumers think that it is likely that they will be able to save money over the next year.
Expectations about the cost of living have decreased, falling by 13 points to register a score of +62. A decrease is a better result because this means a lower cost of living. This again shows optimism about the future and pessimism about the past.

Martin Hamblin GfK surveyed 2013 individuals aged 16+, with quotas imposed on age, sex, region, social class and income to ensure the final sample was representative of the UK population. Interviewing was conducted from 1st - 20th May 2003.

For more information see www.martinhamblin-gfk.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.