Consumer Confidence Volatile in US, UK and Germany

01 September 2005

No fewer than four major surveys in the US, UK and Germany mark the end of August with differing pictures of how Joe, Jo and Johann Public see their employment, personal financial and lifestyle prospects.

  • USA: Upbeat
    Conference Board Consumer Confidence Index
        Based on a survey of 5,000 US households conducted by TNS NFO, the August index shows Americans in a confident mood. It now stands at 105.6 (1985=100), up from 103.6 in July.
        The Present Situation Index increases to 123.6 from 119.3 - its highest level in nearly four years - and the Expectations Index edges up to 93.7 from 93.2 last month.
        Consumers claiming business conditions are 'good' rose to 29.8% from 28.7%,; those who thought them 'bad' fell to 15.1% from 16.7%.
        The employment picture is also cheerier, with the proportion of consumers saying jobs are 'hard to get' down to 23.2% from 23.8%; those claiming jobs are 'plentiful' rose to 23.5% from 22.9%. For the first time since October 2001, the percentage claiming jobs are plentiful outnumbers the proportion claiming jobs are hard to get.
        The short-term outlook has improved marginally since July. Consumers expecting business conditions to improve in the next six months increased to 18.7% from 17.9%. Those expecting conditions to worsen also rose: to 9.7% from 9.5%. The proportion of consumers anticipating their incomes to increase in the months ahead increases to 19.8% from 18.6%.

    USA: Midbeat
    BIG Research Consumer Intentions & Actions Survey
        The survey, based on the responses of 8,000 US consumers, indicates a more cautious climate. Its consumer confidence measure remains steady in August at 44.0%.
        It is down three points from a year ago (47.0%), but up more than five points since 2003 (38.6%). 'Practicality' among consumers is also stable, as 37.3% report they've become more practical and realistic in their purchases over the last six months, down about three points from last year (40.6%).
        Soaring gas [petrol] prices are affecting consumers' financial decisions. Although 'pay down debt' and 'decrease overall spending' are in consumers' top financial plans, fewer people plan to do so over the next three months than at this time last year. There is also a decrease in plans to increase savings and to pay with cash more often.

    UK: Downbeat
    GfK Martin Hamblin/European Commission Consumer Confidence Survey
        The index for the UK fell to minus 4 in August, from minus1 in July, according to the survey of 2,000 adults. The index stands at its lowest level seen since October 2004, when it languished at minus 6.
        The fall was triggered mainly by declines in the Major Purchases measure (which fell by four points to +8) and consumers' views of the country's general economic situation - the latter index having fallen over the last twelve months by six points to minus 24. Predictions for the year ahead fell two points to minus 13.
        Other measures were less negative: perceptions of personal finances over the last twelve months remain the same for the sixth month running (-1). The perception of whether now is a good time to save fell by five points to +21.

    Germany: Upbeat
    GfK Consumer Climate MAXX/ European Commission Survey
        The survey, also based on 2,000 interviews, shows consumer mood indicators improving in Germany, especially in the west, after several months of low morale. GfK's new analysis of social groups shows that older people and those with a lower income remain pessimistic about the economy.
        The consumer climate forecast for September is 3.4 points, up from a revised 3.2 points for August. The Propensity to Buy indicator has risen for the second successive month, and the Economic Outlook indicator climbs 4.1 points to minus 11.6 points, the highest value since January 2005. In Western Germany it increases by 6.5 to minus 6.8 points, while it drops by 4.5 points to minus 30.2 in the East.
        For the first time this month, GfK analysed the findings according to social group. This shows that employed people, housewives and househusbands, students and trainees are all more positive than last month. However, for older retired people, the indicator falls by 8.5 points to -28.5, around 17 points below the national average. In addition, those with low and medium incomes are largely sceptical about economic prospects, despite an improvement since last month.
        The Income Expectations indicator is up 4.2 points overall - increasing by almost 5.1 points in Eastern Germany compared with a 2.6 point rise in the West. The economic expectations measure for people with a low income has fallen by 6.2 points to minus 18.6.
        The upward trend in the Propensity to Buy indicator continues from the previous month, climbing by 8.6 points from minus 13.1 to minus 4.5, the highest level since December 2001. In the West, the indicator rises by 9.5 points, compared with a 4.2-point rise in the East, where it remains very low at minus 33.4 points.

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