GfK consumer confidence for March is unchanged at –28 but
down 13 points on a year ago. It does not reflect reaction to the March Budget.
It remains stronger than the Nationwide measure that slumped 8 points to 39 in February, below its previous recession low
(41, December 2008).
Greater emphasis in the Nationwide measure is placed on jobs
– with both current and future measures falling sharply in February. The March
GfK unemployment expectation measure improved slightly on February, although
remains 20 points below a year ago.
Consumer spending measures continue at depressed levels. The
collapse in the Nationwide measure in February – especially in household goods
– now mirrors the depressed GfK spending climate measure. The latter fell 5
points in March to –29, 12 points lower than in March 2010 when consumers were
far more optimistic.
With some 17% of consumers expecting to buy tickets for the
2012 Olympics* further spending power is set to drain away from retailers.
Of the other measures comprising the GfK headline figure,
the greatest change is in the current measure of household finances, down 3
points to –19. Both current and future measures of the general economic
situation edged higher – albeit from low levels – while the measure of future
personal finances is unchanged.
Inflation continues to be a major influence on consumer discretionary spending. The measure of consumer prices in the past 12 months is up 10 points on February to 102 and is up 30 points on a year ago. 43% of consumers believe prices to have risen a lot compared to 24% a year ago.
The overall consumer outlook is extremely uncertain with the
accompanying JGFR Financial Activity Barometer** finding property
purchase intentions and mortgage intentions at their weakest on record –
indicating little prospect of any spring bounce in the housing market.
*Source JGFR/GfK’s Olympic Attitudes Tracking Survey,
March 2011
** JGFR spring Financial Activity Barometer
covering 18 expected savings, investment and borrowing activities
For a full analysis of the mood of consumer confidence
subscribe to the monthly JGFR UK Consumer Confidence Monitor
(details 0208 944 7510 / 07740 027968)