Consumer confidence is ‘climbing out of the abyss’

Consumer confidence has grown for the fourth month running, however the overall picture is still bleak.

Consumer confidence has risen for the fourth month in a row, however the UK is still “deep in negative territory” and a long way from “sunny uplands”.

The latest GfK Consumer Confidence Barometer shows a three-point uptick in consumer confidence, to -27. In contrast, last month confidence grew by six points, signifying a slight slowdown in growth for May.

This month marks the best overall score since February 2022 when the score was -26.

“Confidence is still negative overall, but we seem to be climbing out of this abyss at last,” Joe Staton, client strategy director at GfK tells Marketing Week.

This is reflected in how people feel about their personal finance situation over the coming year increasing five points to -8, a sharp increase on May 2022’s -25.

People’s confidence in their personal financial situations over the past 12 months, however, grew by just one point to -20.

Similarly, the score for consumers reflecting on the general economic situation over the last 12 months grew one point to -54, whereas the forward looking score for the next 12 months is up four points to -24, an increase on -35 in May 2022.

Staton suggests consumer are “reluctant” to forgive and forget the economic disruption of the last year.

He says: “It’s important to note that the biggest improvements in our five sub-measures are in how we view the future. Personal finances over the next year? Up five points versus April. The wider economy over the coming year? Up four points. Major purchases intentions? Up four points.”

Meanwhile, “The improvements looking back are smaller – up just one point on last year’s finances, and one point on the past year’s economy.”

The major purchase index, an indication of how likely people are to buy big ticket items, is up four points in May to -24, up from -35 last year.

“But it’s the future that matters most to marketers,” says Staton, who asks “Do we now have tantalising evidence that the great British public is seeing a chink of light at the end of the tunnel? Are people slowly but cautiously becoming more optimistic?”

Marketers hope so, he says. “While Brits have little control over the general economy, it’s good to see further improvement in how people view their personal finances in the next 12 months.”