6:36 AM 18th January 2022
Consumer Confidence Fell Slightly In December Amid Omicron Uncertainty
Consumer confidence worsened in December 2021, according to the latest analysis from YouGov and the Centre for Economics and Business Research (Cebr).
it is not all doom and gloom - the house price scores continue to gain strength
The index declined by -0.5 points, falling from 110.5 to 110. This is a small drop, and the overall Index was still in positive territory. However, it suggests that the Omicron variant of COVID-19 and the accompanying uncertainty around the new strain’s severity and the need for new restrictions impacted public optimism as 2021 ended.
YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents answer questions about household finances, property prices, job security and business activity, both over the past 30 days and looking ahead to the next 12 months. Any score over 100 means more consumers are confident than unconfident while any score below 100 shows the opposite.
The business activity measures saw the most significant drop among the underlying consumer confidence measures. The backward-looking measure – which asks employees about levels of business activity at their place of work over the previous month - fell from 115.0 in November to 111.7 in December. There was also a decline in expected business activity in the year ahead with the measure falling from 127.1 to 124.7.
December also halted the upward trajectory of both the forward and backward-looking job security metrics. The figure for job security over the past month declined by -1.8 points to 94.3 while the measure for the year ahead decreased slightly (-0.3 points) to 119.1.
Household finances remained firmly in negative territory. However, while expectations for the year ahead fell from 84.6 to 83.6, people’s experiences over the previous 30 days increased slightly (rising from 83.2 to 83.7).
Both home value measures improved in December. Perceptions of house value over the past 30 days rose 1.2 points between November and December from 126.2 to 127.4 while the outlook for the year ahead jumped almost three points from 132.7 to 135.6.
Darren Yaxley, Head of Reputation Research at YouGov: “While many wanted 2021 to end on a high after the difficulties of the past two years, it's clear that Omicron dampened consumer confidence. Both the backward- and forward-looking business activity and job security metrics fell and, crucially, the household finance measures are notably below where they were this time last year. However, it is not all doom and gloom - the house price scores continue to gain strength and while many measures have fallen, they have declined by more modest amounts than at other phases of the pandemic and most are still in positive territory.”
Kay Neufeld, Head of Forecasting and Thought Leadership at Cebr: “The UK economy faced some significant headwinds towards the end of last year, due to the combination of quickly rising inflation, supply chain bottlenecks and the rapid spread of the Omicron variant. The fall in consumer confidence in December was broad based, with the largest contribution stemming from a drop in the backward-looking business activity measure. The high number of new Covid-19 infections in December and the associated uptick in people required to self-isolate have likely contributed to this as businesses experienced widespread staffing shortages. A small improvement in the household finance metric looking at the past 30 days is welcome, though with the cost of living set to climb further we expect this to be short lived.”