Suprise rebound in consumer confidence

"Consumers have suddenly shown more optimism" says leading retail analysts GfK today with their Major Purchase Index covering furniture and flooring up 3 points.

Describing the results of their February consumer confidence survey as a "suprise rebound from historic lows," their general index rose 7 points.

“Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year," says Joe Staton, Client Strategy Director, GfK.

"While it's too early to talk about ‘green shoots of recovery’, the uptick across all measures should be welcomed. But what’s happening? Are people simply fed up with hearing bad news? Do they see a milder recession than the pundits predicted? Do they sense the most worrying phase of the energy crisis is over?," he asked.

The results need to be put into context. The Major Purchase Index, which surveys consumer appetite for large household purchases such as appliances, flooring and furniture, rose 3 points but that still leaves the index at minus 37. In December last year it was minus 34 and this time last year it was "only" minus 15.

"The headline consumer confidence score is still severely depressed and the mood as well as the economy remain a long way off pre-lockdown levels," says Joe. "But a little consumer resilience might be what we need to soften any downturn in 2023. However, many challenges remain and this may be nothing more than a bubble of hope – and bubbles always burst.”