The June Nationwide Consumer Confidence Index points to a likelihood
of growth slowing in the coming months.
A fall of 5 points (not
seasonally adjusted) in the headline index to 64 takes the measure back to its
level a year ago. In the past 2 months the measure is down 14 points. Its slump
is greater than the GfK measure (itself down for a near record fourth
successive month) as it reflects job sentiment to a larger extent.
Its Expectations sub-index – covering the general economic
situation, job availability and income growth – slumped by 8 points to 90, its
lowest level since May 2009. The balance of people expecting there to be more
or some jobs available in the next 6 months fell on the month from a net balance
of –17% to –30%, its lowest since last August. Fewer people (27%) compared to
30% in May and 33% a year ago expect the economy to be better in 6 months time.
15% of people expect income to rise – the same proportion as expect income to
fall - a big drop from a positive +9% expecting incomes to rise in February.
As a result spending confidence on major purchases, which
has held up well in the past year is reducing. The headline Spending Index fell
3 points to 99 from 102 in May, but masks the fall in spending confidence on
big-ticket items, such as a house or car. The end of stimulus measures may
finally be being reflected in the survey data – the net balance of –11, being
the lowest since January 2009.
To be fully briefed on the mood of the consumer, subscribe
to the monthly UK Consumer Confidence Monitor. Regional and High Earner
versions are available.
To receive a complimentary issue please contact info@jgfr.co.uk or ring 0208 944 7510.