Joe Staton, Client Strategy Director at GfK, says:
“At minus-14 this month, UK consumers are ending 2018 on a pessimistic note with Christmas cheer in short supply. We are five points lower than this year’s opening score in January and were no higher than -7 this summer. This represents a more than five-year low for the index which has bumped along in negative territory since 2016.
"The steep drop of six points for the outlook on the general economy in the coming year is the most telling data point this month with consumers clearly casting a vote of no-confidence in our immediate economic future. The uptick in the ‘major purchases’ measure might be a last festive hurrah for retailers, the only sliver of comfort and joy amidst the gloom.
"In the face of ever-rising costs, and the threat of higher inflation, combined with uncertainty around the outcome of the Brexit negotiations, it’s no surprise that consumers are in a chilly mood and putting on a glum face when they look at the prospects for 2019. Sad to say that an unhappy and uncertain New Year beckons, despite good intentions from all points on the economic and political spectrum."
The Overall Index Score in December 2018 is -14, with three of the five measures decreasing in December and two measures increasing.
The index measuring changes in personal finances during the last 12 months has increased two points this month to -1; this is two points higher than at the same point last year.
The forecast for personal finances over the next 12 months has decreased four points to -1 this month; this is three points lower than December 2017.
The measure for the General Economic Situation of the country during the last 12 months has dropped two points to -31 this month; this is at the same level as December 2017.
Expectations for the General Economic Situation over the next 12 months have decreased six points to -38; this is 10 points lower than December 2017.
The Major Purchase Index increased five points in December to +2; this is six points higher than December 2017.
The Savings Index has increased four points in December to +16; this is 12 points higher than at this time last year.
The UK Consumer Confidence Barometer is conducted by GfK on behalf of the EU, with similar surveys being conducted in each European country. In producing its own reports on the whole of Europe, the EU applies a seasonal adjustment to the data, to smooth out any changes that are functions, at least in part, of the time of year.
Historically, the UK data have not been seasonally adjusted in this way, and to maintain comparability, GfK continues not to apply this adjustment. This can lead to situations where the EU figures show different movements in a particular month from those produced by GfK. Individual months may be affected, but the long-term trend is not.
The UK Consumer Confidence Survey from GfK was conducted among a sample of 2,005 individuals aged 16+ on behalf of the European Commission.
Quotas are imposed on age, sex, region and social class to ensure the final sample is representative of the UK population.
Interviewing was carried out during 1st – 12th December 2018.
The figures contained within the Consumer Confidence Barometer have an estimated margin of error of +/-2%.
Results for the Consumer Confidence Barometer are normally available on the last working day of each month at 00.01am (unless the final working day of a month is a Monday, in which case the results are published on the Friday preceding the final working day). The release date for January is Thursday 31st January 2019.
Any published material requires a reference to both GfK and the European Commission e.g. ‘Research carried out by GfK on behalf of the European Commission’.
This study has been running since 1974. Back data is available from 1996.
Below is an overview of the questions asked to obtain the individual index measures:
Personal Financial Situation (Q1/Q2)
This index is based on the following questions to consumers: ‘How has the financial situation of your household changed over the last 12 months?’
‘How do you expect the financial position of your household to change over the next 12 months?’ (a lot better – a little better – stay(ed) the same – a little worse – a lot worse)
General Economic Situation (Q3/Q4)
This index is based on the following questions to consumers: ‘How do you think the general economic situation in this country has changed over the last 12 months?’
‘How do you expect the general economic situation in this country to develop over the next 12 months?’ (a lot better – a little better – stay(ed) the same – a little worse - a lot worse)
Major Purchase Index (Q8)
This index is based on the following question to consumers: ‘In view of the general economic situation, do you think now is the right time for people to make major purchases such as furniture or electrical goods?’ (right time – neither right nor wrong time – wrong time)
Savings Index (Q10)
This index is based on the following question to consumers: ‘In view of the general economic situation do you think now is?’ (a very good time to save – a fairly good time to save – not a good time to save – a very bad time to save) (Commented on but not included in the Index Score)