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Deloitte Consumer Tracker
by 55 North
Consumer confidence falls for second consecutive quarter
The latest Deloitte Consumer Tracker shows the fall in sentiment among consumers is in stark contrast to business executives.
Consumer confidence fell by one percentage point in the fourth quarter of 2021, reaching -11%, as consumers started to feel the squeeze of inflation and pockets were hit with higher household bills.
The latest Deloitte Consumer Tracker show personal expenditure increased for 41% consumers in the final quarter of 2021, up from 36% in Q3. Of these, 74% revealed it was due to rising prices.
Céline Fenech, Consumer Insights Lead at Deloitte, said: “With the expected squeeze on spending power and higher inflation, another fall in confidence may dent the hopes of a consumer recovery. However, some consumers are still in the fortunate position of having higher levels of savings compared to before the pandemic, indicating some financial resilience.”
Of the Consumer Tracker’s seven measures of confidence,sentiment around the state of the economy recorded the largest quarter-on-quarter decline, falling eight percentage points. However, the fall in sentiment among consumers is in stark contrast to business executives who intend to make increased capital investment a strong priority for the year ahead.
Ian Stewart, Chief Economist at Deloitte, said: “Sharply higher inflation and a squeeze on consumer spending power has hit consumerconfidence. With inflation set to rise further, a tough few months are in prospect. However, high savings, strong consumer balance sheets and rising employment should help soften the blow to spending caused by higher inflation.”
The research shows sentiment around job security and career opportunities and progression are both up, by two and one percentage points, respectively. Stewart continued: “A strong recovery in activity as lockdown restrictions eased has ensured most furloughed workers have been able to return to the workforce. At the same time, the ratio of unemployed people to vacancies sits at a record low meaning, theoretically at least, there is a job available for almost every person out of work.”
