July is often a weak month for consumer confidence as the
second half of the year begins, despite the onset of the holiday season. In 4
out of the past 5 years sentiment recorded by the GfK NOP measure for The
European Commission fell in July, notably in July 2008, collapsing to a record
26-year survey low of –39.
With so much economic uncertainty prevailing, and the media
extensively reporting any gloomy economic news, the fall in confidence was to
be expected.
This July confidence dropped 5 points to –30, following on
from a 4-point fall in June, giving back most of the 10-point gain in May, when
the outlook looked much more optimistic. It is down 8 points on July 2010, when
confidence fell back to recession levels of below –20.
All 5 of the measures comprising the headline measure were down in July, the greatest fall being in the measure of expectations about the future economic situation down 9 points to –27. The current measure of the economic situation now compared to 12 months ago is also down sharply, dropping 7 points to –57.
Both measures of personal finances fell, the current measure
down 5 points to –25 and the future measure down 4 points to –12.
Spending confidence is deteriorating, the measure of major
purchases of household goods such as electrical goods and furniture shed 4
points to –31 and is 15 points lower than a year ago.
All 3 measures of major spending - on cars, property and
major household improvements - continue to be weak. Only the measure of the
likelihood of buying a new car in the next 12 months edged higher compared to 3
months ago, although was down on July 2010.
The JGFR Misery Index – measuring consumers expected
inflation and unemployment expectations - gave back 7 points to 122, its lowest
level since April.
Regionally, only in Northern Ireland is confidence higher –
up 2 points to –35. Elsewhere, confidence fell in all 5 major UK regions. In
Scotland confidence dropped 3 points to –37 and is currently weakest in the UK.
The South, down 5 points to –26 is the most confident region.
For a full analysis of the mood of UK consumers subscribe to
the JGFR UK Consumer Confidence Monitor – for details contact j.gilbert@jgfr.co.uk or ring 0208 944
7510 / 07740 027968.