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20 things
The Nationwide Building Society Consumer Confidence Index for May
9 June 2007
Twenty things you should know about the Nationwide Building Society Consumer Confidence Index for May
1 The Nationwide Building Society Consumer Confidence Index for May indicated that confidence rose by 9 points in May.
2 As part of the study, Nationwide indicated that 80 per cent of people expected there to be no change in the Bank of England Base Rate.
3 5 per cent of respondents expected the Base Rate to rise by half a per cent, while 15 per cent expected a rise of 0.25 per cent.
4 None of the respondents anticipated a drop.
5 The Nationwide Consumer Confidence Index revealed that of the four separate indices, three reported a rise in May.
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6 As part of the study, the Nationwide Consumer Confidence Index reported that people’s expectations of house price growth reached a new high in May. Many expected house prices to rise by an average of 4.5 per cent over the coming six months.
7 According to the monthly Nationwide report, the Expectations Index rose by six points to 97, representing the fifth consecutive rise.
8 Nationwide indicated that the Present Situation Index rose 12 points in May, buoyed by an increase in people who are positive about the current situation.
9 The number of people who believe there are many jobs available rose to 60 per cent, while the number who believe there are few jobs currently available fell by 4 per cent, to 21 per cent, matching the levels of September 2005.
10 However, the Index indicated that 24 per cent of people expected their household income to be higher in six months’ time, down from 27 per cent.
11 The Spending Index was the only Index to fall, with the number of people who believed it was a good time to buy a major purchase falling from 21 per cent to 18 per cent.
12 Those who believed it was a good time to make a household purchase rose from 43 per cent to 51 per cent.
13 The Expectations Index revealed that 46 per cent of respondents believed there would be more jobs available in six months’ time, up from the previous findings, indicating a result of 39 per cent.
14 As a result the Expectations Index rose to 97 points, increasing by six.
15 The study by Nationwide revealed that consumers are upbeat about the current employment and economic situation, with the Present Situation Index rising to 101, reaching the same level as November 2005.
16 Commenting on the findings, Fionnuala Earley, chief economist at Nationwide, said: “Higher interest rates have not affected consumers’ overall confidence, but they do seem to be having an impact on their willingness to spend.”
17 Earley added: “The good weather in early May might have helped put consumers in a brighter mood but, people’s spending intentions responded sharply to the latest interest rate announcement; this may offer some comfort to the Monetary Policy Committee.”
18 The Nationwide CCI is based on a similar approach to that used by the U.S. Conference Board which produces the U.S. Consumer Confidence Index.
19 The Nationwide Consumer Confidence Index is compiled in partnership with TNS.
20 The House Price Expectations data is based on a balance of people who believe that house prices will be higher in six months’ time against those who think they will be lower.
