Consumer confidence up? Sorry, it's not

And here's why . . .

Many newspapers are carrying the story that the GFK NOP consumer confidence improved between August and September, although apparently not significantly so. It seems that UK consumers became more optimistic about the economic outlook and spending; GFK NOP apparently reported that their index of sentiment gained 1 point from August to minus 30. Sorry, it didn't.

This presents data watchers like this correspondent with a puzzle, because, on the same day, the EU Commission reported the results of the same survey. (Note that the GFK conducts the survey for the EU, which pays for it.) And the answers are completely different.

This is where the puzzle really starts, because on its website yesterday, the commission argued that the survey of consumer confidence, using the same data actually fell in September, to its lowest level since April. You can take a look here and even download the data as an Excel file across all the EU countries here.

 

A decline does seem rather more likely than a rise, given that answers to seven questions show that confidence worsened between August and September. So surely it's going to be pretty hard to get the survey to improve?

The EU calculates its index as (Q2+Q4-Q7+Q11)/4. Note, of course, that a higher number to Question 7 is bad. So consumer confidence fell between August and September from -20 to -22. It looks pretty hard to get a positive from 12 numbers when seven of them worsen and two show no change.

Also the overall index that the EU publishes, which is a combination of business and consumer confidence, worsened sharply to 89.5, down from 92.9, which is its lowest level since September 2009.

Up or down? Which is it? GFK and the EU had better sort this one out. It makes little sense to produce estimates that go in different directions from the same bloody survey. It looks very much to me that consumer confidence worsened in September, not improved. Somebody at GFK has a bit of explaining to do!

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

Show Hide image

A global marketplace: the internet represents exporting’s biggest opportunity

The advent of the internet age has made the whole world a single marketplace. Selling goods online through digital means offers British businesses huge opportunities for international growth. The UK was one of the earliest adopters of online retail platforms, and UK online sales revenues are growing at around 20 per cent each year, not just driving wider economic growth, but promoting the British brand to an enthusiastic audience.

Global e-commerce turnover grew at a similar rate in 2014-15 to over $2.2trln. The Asia-Pacific region, for example, is embracing e-marketplaces with 28 per cent growth in 2015 to over $1trln of sales. This demonstrates the massive opportunities for UK exporters to sell their goods more easily to the world’s largest consumer markets. My department, the Department for International Trade, is committed to being a leader in promoting these opportunities. We are supporting UK businesses in identifying these markets, and are providing access to services and support to exploit this dramatic growth in digital commerce.

With the UK leading innovation, it is one of the responsibilities of government to demonstrate just what can be done. My department is investing more in digital services to reach and support many more businesses, and last November we launched our new digital trade hub: www.great.gov.uk. Working with partners such as Lloyds Banking Group, the new site will make it easier for UK businesses to access overseas business opportunities and to take those first steps to exporting.

The ‘Selling Online Overseas Tool’ within the hub was launched in collaboration with 37 e-marketplaces including Amazon and Rakuten, who collectively represent over 2bn online consumers across the globe. The first government service of its kind, the tool allows UK exporters to apply to some of the world’s leading overseas e-marketplaces in order to sell their products to customers they otherwise would not have reached. Companies can also access thousands of pounds’ worth of discounts, including waived commission and special marketing packages, created exclusively for Department for International Trade clients and the e-exporting programme team plans to deliver additional online promotions with some of the world’s leading e-marketplaces across priority markets.

We are also working with over 50 private sector partners to promote our Exporting is GREAT campaign, and to support the development and launch of our digital trade platform. The government’s Exporting is GREAT campaign is targeting potential partners across the world as our export trade hub launches in key international markets to open direct export opportunities for UK businesses. Overseas buyers will now be able to access our new ‘Find a Supplier’ service on the website which will match them with exporters across the UK who have created profiles and will be able to meet their needs.

With Lloyds in particular we are pleased that our partnership last year helped over 6,000 UK businesses to start trading overseas, and are proud of our association with the International Trade Portal. Digital marketplaces have revolutionised retail in the UK, and are now connecting consumers across the world. UK businesses need to seize this opportunity to offer their products to potentially billions of buyers and we, along with partners like Lloyds, will do all we can to help them do just that.

Taken from the New Statesman roundtable supplement Going Digital, Going Global: How digital skills can help any business trade internationally

0800 7318496