Consumer Confidence: Americans Cheery, Europeans Leery

04 July 2005

Last week saw three surveys of consumer confidence, each reflecting significant differences in transatlantic mood.

In the USA, confidence reached a three-year high; in Germany the consumer climate is darkening; while the British have slipped from their recent high to a mood more attuned to the real world.

  • Stateside, the respected monthly Consumer Confidence Index published by the Conference Board business research group, charted a resurgence of consumer confidence in June.
       The survey's overall index, based on 2,500 household responses, rose to 105.8 from 103.1 in May, during which month the index rose more than five points after a fall in April. The latest figure is the highest since June 2002, when the index stood at 106.3.
       As to the current economic situation, the index rose to 120.7 from 117.8, while expectations for the next six months rose to 95.8 from 93.4.
       Sentiment about employment also improved. For the first time in nearly three years, the percentage of consumers noting that jobs are 'hard to get' (22.6%) did not exceed the percentage saying that jobs were 'plentiful' (also 22.6%).
       However, the Board's research director Lynn Franco said June's confidence levels may be hard to sustain given that oil prices recently surpassed $60 a barrel.

  • In Germany GfK's latest Consumer Climate Survey of around 2,000 households, conducted on behalf of the European Commission, recorded a fall in confidence and an uncertain mood.
       Expectations about the economy and incomes have risen slightly, but the propensity to make larger purchases has fallen again. As a result, the consumer climate indicator dropped for the third month in a row.
        German consumers are still unable to see any real sign of economic recovery. Although the indicator was slightly up on the previous month, rising almost 3 points to -13.4, it was lower than a year ago.
       Following a sharp fall to minus 13 points in May, the indicator for income expectations rose slightly by 3 points to -9.9, continuing the up-and-down trend of the last two years.
       The fear of unemployment remains high, with one out of three workers in western Germany and one in two in eastern Germany worried about losing their jobs.

  • It was a similar tale in the United Kingdom, where the GfK consumer confidence index fell for the third month running to -3 (from -1 in May), its lowest since December 2004. But nonetheless the index rested one point higher than the same period in 2004.
       And although consumers seem steady in their perception of personal finances, their views of the general economic situation are declining - down five points to -18 in June, while perceptions of the economic situation for the next twelve months fell for the third month running by three points to -10 in June.
       However, this is still four points higher than June 2004's pessimistic -14.
       The major purchases climate measure cooled only marginally in June, by one point from +5 in May to +4 in June. This flies in the face of a seven point decline last month (from +12 in April to +5 in May).
       The perception of whether now is a good time to save remains at +28 and is considerably higher than June 2004 (+21).

    Data sourced from (UK); additional content by WARC staff