Deloitte Consumer Tracker: Consumer confidence reaches new high in Q1 2014
21 April 2014
Consumer confidence has climbed to its highest level in over two years, according to the latest Deloitte Consumer Tracker. All measures of confidence are up, with overall confidence 11 points higher than in Q3 2011.
Consumers’ confidence in their level of disposable income increased by seven percentage points in Q1 2014 compared with the previous quarter (-20% vs. -27% in Q4 2013) - the fastest growth since the Tracker began. The labour market also showed signs of improving, with less people experiencing a ‘loss or reduction of income’ (12% vs. 14% in Q1 2013).
Net spending on big-ticket items continued to climb (-6% vs. -11% in Q1 2013), up five percentage points compared with the same period last year. Over the last year, net spending in categories such as holidays (-4% vs. -8% in Q1 2013) and electricals (-7% vs. -12% in Q1 2013) rose significantly.
Ian Stewart, chief economist at Deloitte said: “Following a succession of good news about the UK economy, the strong growth in overall confidence this quarter points to consumers being much more positive and suggests the recovery is gathering pace.
“Lower inflation, easier access to credit, historically low interest rates and an improving job market have all helped bolster consumers’ spending power.”
Consumer spending shows no signs of slowing in Q2 2014, as consumers are more positive than they were a year ago and intend to continue to increase their discretionary spending. They are also more confident about their personal circumstances in 2014, expecting lower taxes and the value of their homes to continue increasing. In addition, they anticipate a fall in the cost of living, with fewer consumers expecting food and utility prices to rise.
Ben Perkins, head of consumer business research, concluded: “With less uncertainty and a further fall in inflation and unemployment, real pay is finally rising. This is creating more sustainable conditions for robust growth in consumer spending in the next couple of years. However, although consumers have been more upbeat in Q1 2014, the possibility that interest rates could rise remains a concern for them.”
Notes to editors
About The Deloitte Consumer Tracker
The Deloitte Consumer Tracker is an economic update focussed on consumer spending attitudes and behaviours. Through a quarterly survey of 3,000 adult UK consumers it monitors the patterns of consumer expenditure on a category-by-category basis and the underlying drivers of spending behaviour, notably household disposable income and consumer confidence. It also considers consumers’ spending outlook for the next quarter.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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