Consumers gloomy over economic outlook

9 July 2008

Nationwide’s Consumer Confidence Index for June found that 53% of consumers think the economic situation will deteriorate over the next six months.

The figure is the highest proportion seen this year and is 24% up on figures from June 2007.

The survey also points to a shift in attitudes on household income. Only 16% of consumers polled believe their household income will be higher six months from now, representing a 5% fall from May’s figures and a 12% drop on this time last year.

Fionnuala Earley, chief economist at Nationwide, says: “This month’s drop in confidence is to be expected given the recent run of bad news.

"With reports of rising inflation rates, weaker economic growth and further falls in house prices, it is not surprising that people are feeling much less optimistic about the future."

She adds: "While consumers appear to be fairly relaxed about the availability of jobs, with unemployment beginning to rise, we are likely to see a change in labour market sentiment over the coming months.”

The index indicates that there are some consumers who think there are currently deals to be had in spite of the current climate.

Some 18% of consumers think now is a good time make a major purchase such as a house or a car, the highest proportion seen since July 2007.

Nationwide says this is surprising but adds that consumers may feel now is the time to take advantage of discounts in a buyer’s market.

Have your say

Please do not complete the following form field for security reasons.

Name

E-mail

Comment

Post as

Anonymously

Display name

I have read and agree to the terms and conditions