Consumer recovery well under way

The Q4 JGFR/GfK Financial Activity Barometer reflects the impressive recovery in consumer confidence of recent months. Septemberís GfK headline sentiment measure rose 3 points to -10, its best level since November 2007.

A very strong rebound in economic optimism is behind the consumer recovery. In the past 6 months the proportion of people who believe the general economic situation has got better over the past 12 months is up from 8% to 25%, while the proportion of people who expect the economic situation over the next 12 months to improve is up from 21% to 41%.

Improved public perception of the jobs market has helped in boosting optimism. A year ago a net -52% of adults expected the number of people unemployed in the next 12 months would increase. In September 2013 a net -10% expect the numbers of unemployed will increase.

The JGFR Financial Well-being Index covering personal finances, saving and spending confidence continued its strong summer recovery. The headline measure gained 5 points to -27, its best level since February 2010. The measure may see a return to positive financial wellbeing far sooner than we predicted earlier in 2013.

Consumer attitudes towards the recovery vary across segments with the confidence gap between men and women showing little sign of narrowing. In September the gap (12 points) was close to its August record of 13 points. Menís confidence (-4) compares to womenís (-16). Over 65s confidence jumped 7 points to -12, and now is 4 points better than the younger baby-boomer 50-64 age group.

Far more people intend to save, invest, borrow or repay debt than in Q3 Ė up from 69% to 77%, the highest proportion since March 2010. All 3 activity indices improved with more people intending to save / invest (69% v 58%, June and 62% September 2012), borrow (19% v 11% June and 17%, September 20120 ) and repay/pay down debt (30% v 25%, June and 24% in September 2012)

With the residential housing market once more occupying policy makers as a key means to moving the economy ahead, great focus is placed on the impact of schemes such as Funding for Lending and Help to Buy. The JGFR Housing Market Confidence Index (on a 2-quarter moving average basis) gained 8 points to 61.4, (55.6 Q4, 2012)

Financial services providers and intermediaries will take heart from the latest survey giving clear evidence of a new dawn in financial services underway.

To discuss the JGFR confidence and financial activity data please contact John Gilbert (07740 027968 or 0208 944 7510) or email j.gilbert@jgfr.co.uk