UK consumer confidence dropped back slightly in April after a March bounce with people becoming even more cautious over spending, a new report published today reveals.
The Nationwide Consumer Confidence Index, compiled by Nationwide Building Society, fell by two points to 43 during the last month, only four points above its record low seen in February 2011.
A depression in spending confidence was a large driver of the downturn, as only 20 per cent of those surveyed believed April was a good time to make a major purchase and the overall Spending Index declined by five points to 62.
Robert Gardner, Nationwide’s Chief Economist, commented: “Consumer confidence remained subdued in April and continues to hover precariously close to the record low seen in February.
“At 43, the index stands some 32 points lower than at the same stage last year, and 37 points below its long-run average.
“Clearly, consumers are still feeling downbeat about the current situation and there is little to suggest that they expect things to improve much over the coming months.”
Despite the nation currently lacking self-assurance in regards to their finances, Gardner at least takes comfort in the fact that there was little change in most of the indicators, and the proportion of people thinking it was a good time to buy household goods actually increased one per cent to 24 per cent during the month.
The reluctance to spend on homewares and big ticket items has been evident with the difficulties experienced in the electricals (Comet), home & DIY (Focus DIY) and home furnishings (Carpetright) sectors over recent weeks.
Fears over another recession seem to have receded since March but disposable income still remains weak with low growth high inflation and constrained pay deals all impacting on consumers spending.
Confidence in the present situation and in future expectations both fell by two points in April to 19 and 58 respectively.
Gardner added: “The past 12 months have seen confidence progressively fall back towards the lows recorded during the recession.
“It now seems fairly safe to say that the up tick we saw in March was not the beginning of any sustained resurgence in confidence. It may be some time yet before we begin to see this emerge.”