Consumer confidence falls
- YouGov/Cebr Consumer Confidence Index declines for first time since December 2012
- However, analysis points to consumer confidence being driven less by the property market and becoming more broad-based
- Job security and expectations for business activity in the workplace at highest-ever levels
The monthly YouGov/Cebr Consumer Confidence Index has fallen for the first time since December 2012. The fall comes as homeowners become slightly less optimistic about the property market, with expectations for house values falling for the third straight month.
However, despite these falls, YouGov’s Household Economic Activity Tracker (HEAT) data points to consumer confidence becoming more broad-based in recent months – particularly when it comes to the workplace. Job security is at its highest point since YouGov started collecting data on it in 2009 and employees’ expectations for business activity in the workplace over the next 12 months are also at record levels.
YouGov and Cebr’s analysis suggests that consumers’ experiences and expectations for their household finances are also continuing to improve steadily. Both the forward-looking measure (asking about the next 12 months) and the backward looking measure (asking about the last 30 days) show consumers’ opinions about their household finances to be close to their highest-ever scores.
Stephen Harmston, Head of Syndicated Research at YouGov: “So far, much of the improvement in economic optimism has been driven by house prices. However, as the property market has cooled, the fall in overall economic optimism has been pretty modest. This is because consumer confidence is becoming more broad-based and increasingly resilient.
“While many consumers face challenges over the cost of living, those in work are experiencing record-levels of job security. It is a similar story when it comes to the levels of activity people see in their workplace. The key issue surrounding consumer confidence now is whether this workplace confidence will result in wage increases. If it does, we can expect to see it reflected in an improvement to peoples’ household finances and hence consumer confidence.”
Charles Davis, Director at the Centre for Economics and Business Research: “While consumer confidence has fallen slightly we should take it with a pinch of salt. The slight dip is from the highest level in seven years and actually some of the important indicators like job security have been improving on the back of rapid hiring from businesses. But there is a lingering concern that this hasn’t yet translated into pay growth and stronger household finances. The recent plateau and slight dip in consumer confidence is a sign that we can expect the economy to slow slightly in the second half of 2014. But we are still on course for the fastest growth in 2014 since at least 2007.”
YouGov/Cebr Consumer Confidence Index
After 19 months without a decline, the YouGov/Cebr Consumer Confidence Index fell in August. It now stands at 113.8, a fall of -0.6 points in the last month. This is the first time the Index has fallen since December 2012 and is the highest month-on-month decrease since October that year.
Source: YouGov/Cebr HEAT data, August 2014, using a three-month rolling average.
Notes: Axis value of 95.5 represents the average HEAT Consumer Confidence measure since the data set began in 2007.
Property values
Expectations for house values over the next 12 months have fallen for the third successive month and are now back to where they were in January 2014. Notably, there has also been a second successive fall in whether homeowners feel their properties have increased value over the last month. This cooling in people’s confidence of the property market follows a year and a half of steady increases.
Source: YouGov/Cebr HEAT data, August 2014, using a three-month rolling average
Workplace confidence
Many measures of workplace confidence have improved over the last six months. Consumers are experiencing greater job security, with the indicator reaching its highest score since YouGov started collecting data in 2009. Employees are also increasingly confident about levels of business activity in the workplace, with expectations for the next 12 months being at their highest levels since YouGov started collecting data three years ago.
Source: YouGov/Cebr HEAT data, August 2014, using a three-month rolling average
Household finances
How consumers feel about their household financial situations has improved markedly since the start of the year. The measure looking at whether their situations have improved over the past month reached peak last month (although it has fallen slightly this month). Meanwhile, expectations for household finances over the next year are nearing levels not seen since spring 2010 – before the last general election.
Source: YouGov/Cebr HEAT data, August 2014, using a three-month rolling average
