Consumer confidence proves resilient to spending pressures, according to Deloitte Consumer Tracker
Consumers are showing resilience in the face of spending pressures, according to the latest consumer confidence tracker out today from Deloitte.
UK consumer confidence remained flat in the fourth quarter of 2017 compared to the same period the year before, marking the first time that confidence has not fallen in the final quarter of the year since Deloitte’s tracker began in 2011.
Combined with a three percentage points rise in the third quarter, overall consumer confidence in the UK rose in the second half of 2017.
Read more: Consumer confidence has rallied despite a squeeze on household finances
Deloitte’s quarterly survey of more than 3,000 UK consumers, carried out between 5 and 10 January, found overall consumer confidence remaining flat at minus seven per cent for the fourth quarter.
Confidence in the level of disposable income rose by four percentage points compared to the previous quarter, while confidence around managing personal levels of debt also rose, by one percentage point.
With UK unemployment now down to 1.44m, as reported last week, Deloitte said its tracker had found record levels of confidence in relation to job security, rising by three percentage points to minus four per cent.
Consumers were less assured about job opportunities however, and career progression, with that dipping two percentage points on the third quarter.
Ian Stewart, chief economist at Deloitte, said:
Despite a fierce squeeze in spending power last year, consumers went into 2018 in pretty good spirits.
Low interest rates and plummeting unemployment mean that it’s not all been bad news for consumers.
With record levels of job vacancies and an economy that continues to grow we would expect wage growth to edge higher this year as inflation eases. The worst of the squeeze on incomes is probably behind us.
The figures also indicated the pressure felt on spending, with discretionary spend dropping by one percentage point compared to the previous year. Price inflation has seen spending on essential items rise by two percentage points year-on-year, Deloitte said.
“We typically see a dip in confidence in the final quarter of the year, with consumers being surveyed at a time when they are conscious of their spending levels and health after the festive period. So the fact that confidence has remained flat is a clear indication that the UK’s consumers are remaining resilient to spending pressures,” added Ben Perkins, head of consumer business research at Deloitte.
One important observation is that consumers are starting to show more confidence about their personal levels of debt. The hope is that this is a sign of consumers taking control of their debt, rather than an acceptance that it exists.
Read more: Firms feel confident in their prospects but consumer confidence slumps