The Index of Consumer Sentiment Quarter 3 2022

In Q3 2022, consumer sentiment has stabilised at a very low level. It’s still much lower than what we might consider to be “normal”, but many may be surprised that consumers are not feeling even worse. As we’ll see in this report, there are significant groups of customers who are feeling much less confident than even this low overall score indicates.

With nearly four years’ worth of data about consumer sentiment in the UK, the Index of Consumer Sentiment is proving its value as an indicator of how customers are feeling, and therefore how they’re likely to behave.

Download the latest white paper to explore the findings in more detail.

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The topline trends

The outbreak of the pandemic led to the single largest drop in the Index that we’ve ever seen, between Q1 and Q2 2020, but that fall was nearly replicated between Q1 and Q2 this year as the cost of living crisis really started to bite.

The latest score, 57.4 for Q3 2022, shows that consumers have not yet started to recover their financial confidence, but in some respects this is actually a better result than many expected. Consumer confidence may not be recovering, but overall it does seem to have stopped falling.

The key findings
  • The Index for Consumer Sentiment has stabalised at a very low level at 57.4

  • Consumer Sentiment correlates with ONS household spending data

  • US consumer sentiment now lags the UK for only the second time since we started measuring.

  • Energy and Leisure are two sectors that look to be heavily affected by reduced consumer spending

  • For those with more debt, the sentiment score stays low even as income levels increase

  • The 22% of consumers who told us they were worried about affording the basics have the lowest sentiment score

  • Important differences in consumer sentiment based on customer demographics

  • The overall outlook is pretty bleak and the long term trend is clearly downward

TLF Research founder, Nigel Hill, had the following to say in his foreward:

Most people are less confident and will have to reduce discretionary spending, the main lesson for organisations is that they are likely to be spending more time at home. Whether you are a housing association, a retailer or a service business, anything you can do to make customers’ home lives better will likely pay dividends going forward.

Download the full report now and let us know if you have any questions.

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