Consumer confidence has hit its highest level in the UK for six years, jumping eight points on the previous quarter to 87 in Q3 2013 – according to the latest figures from Nielsen, a leading global provider of information and insights. The UK increase was the joint-fourth highest among 60 countries measured.
The last time the UK index was higher than 87 was in Q3 2007 (94). Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions each quarter among more than 30,000 internet consumers in 60 countries.
Consumer confidence in the UK is now further outstripping the European average, which increased three index points to 74 after three consecutive quarters fixed at 71.
In Germany (92) the consumer confidence index rose two points, in both France (61) and Spain (56) it also rose eight points, while Italy (47) rose six points.
Positivity regarding recessionary sentiment at 5½-year high
The number of consumers believing that the UK is in a recession dropped seven points to 74 percent – the lowest level for five and a half years (Q1 2008, 65%).
The proportion believing the country will be out of recession in the next year jumped from 14 percent in Q2 2013 to 19 percent – the highest level in three years (Q3 2010, 20%).
The numbers feeling positive about their personal finances jumped from 41 percent in Q2 2013 to 45 percent in Q3 2013 – the highest level for six years (Q3 2007, 54%).
Positive spending behaviour hasn’t been higher for seven years
The number of UK consumers feeling that now is a good time to make purchases rose by five percentage points on the previous quarter to 39 percent in Q3 2013. While this matches the level in Q3 2007, this level hasn’t been surpassed since Q3 2006 (44%) – seven years ago.
The numbers who say they have changed their spending habits to save money dropped to 63 percent in Q3 2013 – the lowest level for over three years (63% in Q2 2010). This compares to 81 percent of Italians, 77 percent of Spaniards, 63 percent of French and only 33 percent of German consumers.
Nielsen managing director for UK & Ireland Chris Morley: “UK consumers have become more savvy shoppers over the last three years. By shopping differently, they have weathered the storm of rising household costs and falling real-term wages. Throughout this period, British consumer confidence remained stubbornly weak, but in recent months it has finally taken an upward turn as the green shoots of economic recovery start to show.
“Positive news around momentum in the UK housing market has added to the change in mood. Looking ahead, many UK households still intend to spend carefully should economic conditions improve, so we anticipate a continuation of great offers for shoppers, and that leads us to forecast an easier ride for UK consumers over the next three years.”
‘Rising utility bills’ – an increasingly dominant concern
‘Rising utility bills’ was the only one of UK consumers’ five strongest concerns to increase on the previous quarter (see chart below). It is now the first or second biggest concern for 31 percent of people (27% in Q2 2013) – noticeably higher than the European average (23%).
Job security (21%), rising food prices (20%) and debt (16%) all stayed the same while the economy dropped as a top-two concern from 24 percent to 19 percent (now the fourth strongest UK concern, overall, compared to second in Q2 2013).
E.g. in Q3 2013, ‘rising utility bills’ was a top-two concern for 31% of UK consumers
Positivity regarding job prospects at 5½-year high
The number of Britons feeling positive about their job prospects jumped from 24 percent to 31 percent in Q3 2013 – the highest level for five and a half years (Q1 2008, 34%).
The number of British consumers who feel positive about their job prospects is now above the European average (26%), and while well ahead of those in France (14%), Spain (12%) and Italy (9%), remains far lower than in Germany (54%).