- Consumer Confidence Index improves to 111.5 in November
- Increase in expectations of household financial situation over next 12 months after pay growth announcement
- But possible trouble on the horizon as job security and business activity measures decline
Source: YouGov/Cebr HEAT data, November 2014
Notes: Axis value of 96.4 represents the average YouGov/Cebr Consumer Confidence Index score since the data set began in 2007.
This month the YouGov/Cebr Consumer Confidence Index has improved by 2.1 points in November to 111.5, but remains below the levels seen through the spring and summer.
Five of the eight individual components that make up the Index improved in November. The largest increase came in consumers’ expectations of their household financial situations over the next 12 months, which now stands at its highest level since YouGov began collecting the data in February 2009. It comes after ONS figures showing real wages increased for the first time in five years.
However, three of the measures fell further in November, with both the backward and forward-looking measures of job security declining, indicating that the recovery could be put under pressure next year. Job security over the previous 30 days fell to its lowest level since April 2014 and the measure looking towards the next 12 months is at its lowest since June this year. Furthermore, employees’ experience of business activity in the workplace over the last month fell to its lowest level since August.
Stephen Harmston, Head of YouGov Reports: ‘After last month’s fall an increase in consumer confidence is welcome, especially now that it seems that the recovery has finally started to reach people’s pockets. However, there is a dark cloud on the horizon. The data looking at job security continue to fall suggesting that at the very moment consumers feel the benefits of growth they are becoming more circumspect about their employment prospects. This in turn threatens their willingness to spend in the long-term and hints at problems for the recovery in 2015.’
Charles Davis, Director at the Centre for Economics and Business Research: 'The slight improvement in consumer confidence is a positive but the underlying figures point to a slowdown in the pace of growth. Although unemployment dropped rapidly over the last year, underemployment persists and there are hints of a wobble among the workforce. Next month’s figures will show which way the wind is blowing as we enter 2015. My suspicion is the uptick in consumer confidence points to some resilience but we should still be on the look out for slower growth in 2015.’
Image from PA