Great differences in consumer confidence

15/08/2005 12:22

Statistics Netherlands has been measuring the confidence of consumers in the Dutch economy every month since 1986. In the last twenty years there were on average slightly more pessimists than optimists among consumers. Among the various groups of consumers there are great differences.

Consumer confidence

Statistics Netherlands has been measuring the confidence of consumers in the Dutch economy every month since 1986. It compiles an index from the results of the survey. This index indicates to what extent households think that the economy is getting better or deteriorating. In the survey, around one thousand households are asked to answer five questions. In addition to consumer confidence, two component indicators are also calculated. The first is based on the first two questions and refers to the economic climate. the second component indicator refers to ‘willingness to buy’ and is based on the answers to the last three questions. Respondents can answer that the situation has deteriorated (pessimists), that the situation has improved (optimists) or that the situation remained the same. Consumer confidence is calculated by subtracting the percentage of pessimists from the percentage of optimists.

On average more pessimists than optimists

In the last twenty years there were on average slightly more pessimists than optimists among consumers. In their opinions on the economic climate pessimists exceeded optimists, but optimists were in the majority where the situation of consumers’ own finances were concerned. And asked whether the time was right to buy expensive durable goods such as furniture and cars, there were again on average more optimists in the last twenty years.

Average values of consumer confidence since 1986

Highest incomes least negative

Consumer confidence correlates strongly with income, age and sex. The confidence of consumers in the 20 percent highest incomes group was -3 in the second quarter of 2005. The average score for all consumers was -21. Young adults aged between 18 and 24 years and men were also less negative than average about the economy. The 20 percent lowest incomes group, people over the age of 65 and women were more negative than average. Confidence in the 20 percent lowest incomes group was -32.

In the second quarter of 2005, men had considerably more faith in the economy than women, young people had more faith than older people and higher incomes more faith than lower incomes. The picture is the same for previous quarters

Consumer confidence by sex, age and income, 2nd quarter 2005

Varying differences in opinions on economic climate

The various groups of consumers also differ in their opinions on the economic climate. However, these differences are not consistent in time, as can be seen from the breakdown by income. At the beginning of 2000, the income groups differed clearly in their opinions on the economic climate. When the opinions became more negative from the end of 2000, the differences between the income groups decreased.

At the lowest point for confidence in the economic climate - in the first quarter of 2003 - the difference in opinions on the economic situation between the highest and the lowest income groups was only 4 points. Since then the opinions have become more positive and the difference between opinions has increased again. In the second quarter of 2005 the difference between the highest and the lowest income group was 27 points.