| Consumer steer clear of major purchases |
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| Written by Adrie van der Luijt | |
| Friday, 21 December 2007 | |
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The Consumer Confidence Index score this month stands at -14, the lowest it has been since December 1995.
Figures released by GfK NOP show that the major purchases measure also continues a downward slide and is now at its lowest since June 1991. Consumers are concerned about the general economic situation in the past 12 months and for the next 12 months which both dropped this month. Dose of realism Rachael Joy of GfK NOP said that consumers were suffering from a dose of realism. She pointed out that all five measures dropped this month, with the major purchases measure in the biggest drop this month of seven points. "Traditionally at this time of year you would see a drop whilst consumers wait for the January sales, but this combined with reports of a “credit crunch” has resulted in this measure dropping to its lowest level since June 1991,” Joy added. The general economy over the past and next twelve months both saw major drops, a reflection of inflation and price increases. Even the interest rate decrease announced on the 6th December, however, has done little to alleviate these concerns. “As we go into 2008 it will be interesting to see if anything can improve the mood of the Consumer,” Joy remarked. Personal finances The fall in the index score this month has been caused by a decrease across all five of the core measures. The annual moving average has dropped to -7. The index measuring changes in personal finances during the last year has dropped by one point to a score of -1, the same as December last year. There has been a drop in opinion regarding the forecast for personal finances over the next year too. This has dropped by one point to a score of +8; three points lower than in December 2006. The measure for the general economic situation of the country during the last twelve months has dropped to a score of –36, seven points lower than December last year. This month there has been a decrease in expectations for the general economic situation during the next twelve months, with the index dropping five points to –26, seven points lower than in December 2006. The major purchases measure has seen another drop this month falling by seven points, from -7 to -14. This is ten points lower than in December 2006 and it has not been this low since June 1991. The ‘now is a good time to save’ Index has also seen a decrease with a drop of two points to +33, five points higher than in December 2006. Related articles
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