Consumer Confidence Tracker Prepared by - Behaviour & Attitudes

Consumer Confidence Tracker Prepared by - Behaviour & Attitudes

Consumer Confidence Tracker October 2007 Prepared by: DB/bs Behaviour & Attitudes Table of Contents Table of Contents 2 INTRODUCTION 3 SUMMAR...

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Consumer Confidence Tracker October 2007

Prepared by: DB/bs

Behaviour & Attitudes

Table of Contents

Table of Contents

2

INTRODUCTION

3

SUMMARY & CONCLUSIONS

4

DETAILED CHARTS

6

APPENDIX ‘A’ - TECHNICAL DETAILS

13

APPENDIX B - THE QUESTIONNAIRE

14

APPENDIX ‘C’ – EXTRACT FROM THE APRIL 2007 REPORT ON THE IMPACT OF THE ECONOMIC CLIMATE ON THE ELECTION OUTCOME. 16

2

INTRODUCTION This report presents the findings of the latest stage of the Behaviour & Attitudes’ Consumer Confidence index with fieldwork undertaken between 28 th September and 9 th October, 2007. The Consumer Confidence index began in January 2002 and has been conducted at two/three monthly intervals since that time. The information is collected as part of the Behaviour & Attitudes Barometer survey. Technical notes on the survey and a copy of the questionnaire used are included as appendices to this report. Because it has become increasingly difficult to present the full data series in easily assimilated charts, we have condensed all of the earlier data into annual averages for the years 2002 – 2006. This is presented as the long term trend in each instance. Alongside this, we have shown the data for each of the surveys undertaken during the past year: the short term series. This has allowed us to present the raw material for each of the key indices: •

The Economy (looking back and looking forward)



Personal Finances (looking back and looking forward)



Plans in regard to personal assets, purchases of goods, and services and savings

We begin with a summary of main conclusions. This is then followed by a set of charts summarising trends on each question, a set of tabular results and a series of appendices: •

Appendix ‘A’ – Analysis of sample



Appendix ‘B’ – The Questionnaire



Appendix ‘C’ – Extract from the April 2007 report on The Impact of the Economic Climate on the Election Outcome.

3

SUMMARY & CONCLUSIONS



The latest phase of the B&A Consumer Confidence Tracker shows the biggest slippage in consumer confidence since 2003 (with the exception of the short term ‘slip’ in September 2005 following the “Rip Off Ireland” TV programmes).



Since July consumer perceptions of the economy in general have fallen by 17 percentage points.



Assessments of peoples’ personal economic circumstances have fallen by 11% points over that period.



In considering their personal circumstances looking a year ahead, the balance of opinion is negative (minus 4% points), for the first time since November 2003.



People’s purchasing intentions, looking forward, are beginning to reflect this pessimism. For the first time in over three years, there is a negative balance in expectations of future purchasing: albeit a narrow one (minus 1% point).



People’s expectations in regard to savings are also down (minus 8 % points, as against minus 3% points in July).



Even people’s assessments of their personal asset bases are coming into question. 18% expect their personal assets to increase over the coming year as against 13% expecting them to decline (a favourable balance of plus 5% points). That is down from a positive balance of 19% points three months ago and 31% points a year ago.



In our April 2007 report we made the point that economic circumstances prior to the 2007 Election were significantly more favourable than they had been before the one five years earlier (May 2002).

4



In the table set out below we can see that matters have disimproved significantly since then: moving much closer to the depressed mood which was evident just before the 2002 Election.



It would seem that the Taoiseach got his Election timing “just right”.

SUMMARY OF INDEX SCORES 2007 vs 2002 May 2002

April 2007

October 2007

National Economy

%

%

%

Î

Looking back

-34

+1

-25

Î

Looking forward

-26

-11

-32

-20

+6

-4

+3

+18

+5

+11

+27

+6

-6

+4

-1

-19

-5

-8

Personal Finances Î

Looking Back

Î

Looking Forward

Assets Purchase Plan Savings



As appendix ‘C’ to this document we enclose an extract from an earlier report (April 2007) which makes this very clear.

5

DETAILED CHARTS ECONOMY – LOOKING BACK Country is now …

Long Term 2002 2003 2004

2007

Short Term 2006

2005 2006

Feb

Mar

May

July Sept

Nov

Jan

April

Better off 13% 7% 23%

29% 31%

27%

Same

27% 30% 31% 29% 29% 26% 35% 36%

July

21%

Oct

13%

34% 49% 42% 45%

46% 47%

46% 45% 48% 46% 47% 42% 49%

52%

66%

Worse off 53% 38%

35% 26% 23%

GAP GAP

-40 -40 -59 -59 -13 -13 +3 +3

+8 +8

26% 25% 23% 24% 23% 22% 25% 27% 18% +18 +18

+1 +1 +5 +5

+8 +8 +5 +5 +13 +13 +7 +7 +1 +1 -6-6

-25 -25

Q.1 Thinking about the economy as a whole, do you think that the country is better off, worse off, or about the same as last year? 2

ECONOMY – LOOKING FORWARD Country is now …

Long Term 2002 2003 2004

2007

Short Term 2006

2005 2006

9% Better off 13% 20% 25% 26%

Feb

Mar

May

July Sept

Nov

Jan

April

July

20% 19% 25% 24% 23% 28% 26% 30% 26%

Oct

12%

32%

Same

38%

44% 43% 43% 47% 50% 47%

48% 48% 50%

49% 47% 47% 50%

59%

Worse off 49%

27%

GAP GAP

-36 -36 -50 -50

-17 -17

44%

26%

37%

-2-2

19%

==

+11 +11

31% 35% 29% 28% 26% 30% 25% 25%

-3-3

-3-3

-2-2

-7-7

+3 +3

+1 +1 -11 -11 -16 -16 -32 -32

Q.2 And what about the coming year, do you think that the country will be better off, worse off or about the same as this year?

3

6

BALANCE OF OPINION ECONOMY Balance +/-

Long Term

50 +50

Short Term

40 +40 +30 30

+18

+20 20

+3

+10 10

+8

0

+11

0 -2

-17

-10 -20

+1

+5

-3

-3

+13

+8 +5 -2

+7 +1 -7

+3

-6

+1 -11

-13

-30 -40 -40

-36

-50 -60 -60

-40

-16

-25 -32

Looking Back

-50

Looking Forward

-59

-70 -70

2002 2003 2004 2005 2006

Feb

Mar

May

Yearly Averages

July

Sept

Nov

Jan

2006

April

July

Oct

2007 4

PERSONAL FINANCES – LOOKING BACK Now feel …

Long Term 2002 2003 2004

Better off

15% 11%

21%

2007

Short Term 2006

2005 2006

26%

Feb

Mar

May

July Sept

Nov

Jan

April

July

25%

26% 24% 25% 27% 25% 29% 27% 25% 26%

51% 52%

55%

24% 22%

19%

Oct

19%

45%

Same

47% 47%

Worse off

GAP GAP

38%

-23 -23

52% 51%

55%

52%

58% 50% 54% 56% 54%

44% 32%

-34 -34 -11 -11

+1 +1

+4 +4

+7 +7

24% 24%

==

18%

+1 +1 +8 +8

23% 21% 19% 19% 20% 23%

+2 +2

+8 +8

+8 +8

+6 +6 +6 +6

Q.3 Do you feel better off financially, worse off financially or about the same compared to last year?

-4-4 5

7

PERSONAL FINANCES – LOOKING FORWARD Expect it to be …

Long Term 2002 2003 2004

Higher

22% 22% 25% 25% 30%

The same 54% 54%

Lower

GAP GAP

24% 27%

-2-2

-8-8

58%

Feb

Mar

May

July Sept

Nov

Jan

April

July

31% 28% 29% 31% 32% 31% 33% 28% 29%

Oct

22%

62% 58%

58%

17% 13% 12% +8 +8 +16 +16

Q.5

2007

Short Term 2006

2005 2006

+18 +18

57% 59% 58% 52% 57% 55% 62% 59% 59%

9%

17% 14% 12% 11% 16% 12% 12% 10% 12%

+22 +22 +14 +14 +17 +17 +20 +20 +16 +16 +19 +19 +21 +21 +18 +18 +17 +17 +5 +5

Do you expect your income in the next year, after inflation and taxes, to be higher, lower or the same as in the last twelve months?

6

BALANCE OF OPINION - PERSONAL FINANCES Balance +/50 +50

Long Term

Short Term

40 +40 30 +30

+16 +18

20 +20

+4

00 -2 -8

+1 -11

-10 -10

-30 -30

+14 +17

+20

+16 +19

+21

+18 +17

+8

10 +10

-20 -20

+22

+7 +7

+1

+8

+2

+5

+8 +8 +6 +6

-4

-23 -34

Looking Back

-40 -40

Looking Forward

-50 -50 -60 -60 2002 2003 2004 2005 2006

Yearly Averages

Feb

Mar

May

July

2006

Sept

Nov

Jan

Mar

July

Oct

2007 7

8

GENERAL ECONOMY VS PERSONAL FINANCES Balance +/-

Long Term

50 +50

Short Term

40 +40 30 +30 20 +20

+8 +11

10 +10

+9

+7

+14 +8

-1

00

-11 -10 -10 -21

+4

0

-20 -20 -30 -30 -40 -40

+14

+7

+2

-2

+6

+15

+13 +12 +11 +4

+8 +2

-5

0 -11

-15

-28

-38

Personal Economy

-50 -50 -60 -60

-55

2002 2003 2004 2005 2006

Feb

Mar

May

Yearly Averages

July

Sept

Nov

Jan

April

July

Oct

2007

2006

8

PERSONAL ASSETS– LOOKING FORWARD Expect them to be …

More

Long Term 2002 2003 2004

19% 22%

No change 68%

Feb

Mar

May

July Sept

Nov

Jan

April

July

36% 38%

44%

32% 28% 38% 36% 38% 38% 36% 35%

69%

65% 59% 57% 54%

13% 13%

Oct

18% 28%

65%

Less

2007

Short Term 2006

2005 2006

7%

5%

5%

Difference Difference +6 +6 +9 +9 +21 +21 +31 +31 +33 +33

2%

62% 55% 59% 58% 57% 59% 60%

6%

5%

4%

5%

5%

5%

6%

63%

9% 13%

+42 +42 +32 +32 +31 +31 +37 +37 +36 +36 +31 +31 +30 +30 +27 +27 +19 +19 +5 +5

Q.6 Do you expect your assets (your house, shares, pension entitlements, savings) In the next year to be higher, lower or the same as in the past year? PROBE: A lot or a little

9

9

PURCHASING GOODS AND SERVICES – LOOKING FORWARD Expect to purchase …

Long Term 2002 2003 2004

16% 15% 18% 20% 21%

More

The same 58% 58%

Less

26% 27%

Difference Difference -10 -10 Q.7

2007

Short Term 2006

2005 2006

Feb

Mar

May

July Sept

Nov

Jan

April July

Oct

20% 19% 21% 19% 21% 23% 23% 18% 21% 17%

65%

64% 64% 65%

67% 67% 64% 67% 66% 63% 64% 68% 69%

18% 16% 14%

18% 12% 14% 15% 14% 13% 14% 13% 14% 15%

-12 -12

== +4 +4 +7 +7

+8 +8

+5 +5

+6 +6

+5 +5

+8 +8 +9 +9

+10 +10 +4 +4 +6 +6 -1-1

In the year ahead, do you expect to purchase more, less or the same amount of goods and services as in the past year? 10

SAVINGS – LOOKING FORWARD Expect to save …

Long Term 2002 2003 2004

2005 2006

13% 11% 17% 18% 18%

More

51%

2007

Short Term 2006 Feb

Mar

May

July Sept

Nov

Jan

April

July

Oct

19% 18% 17% 18% 18% 19% 20% 16% 20% 17%

50%

The same

58% 59% 63%

59% 63% 57% 58% 63% 62% 64% 64% 63% 58%

25% 23% 19%

23% 23% 25% 18% 19% 19% 18% 18% 22% 21%

36% 39%

Less

Difference Difference Q.8

-23 -23 -28 -28

-8-8

-5-5

-1-1

+1 +1

-1-1

-2-2

==

-5-5

+1 +1

-2-2

-5-5

-3-3

Do you expect to save more, less or the same amount in the year ahead compared with the last twelve months?

-8-8 11

10

BALANCE OF OPINION Expectations in regard to Assets, purchases, and savings Balance +/60 +60

Long Term

50 +50

Assets Purchase Savings

40 +40

+31

+30 30

Short Term

+42 +37 +32 +31

+33

+36 +31 +30

+21

+27

+20 20 +10 10

+6 +9

00 -10 -10

-10 -12

+4

+7

-8 -1

+8

1

+5

-1

-5

+6

-2

+5 -2

+8

+9

+19

+10 +4

+1 -5

+6 -3

-2

-5

+5 -1 -8

-12

-20 -20 -30 -30 -23 -28 -40 -40 2002

2003 2004

2005 2006

Yearly Averages

Feb

Mar

May

July

2006

Sept

Nov

Jan

April

July

Oct

2007 12

11

VOTING IN LAST GENERAL ELECTION (Base: All adults 18+)

All

76%

Gender: Male

75% 77%

Female Age:

38%

18-24

67%

25-34

85%

35-49 50-64

90%

65+

91%

79%

Class: ABC1 (white collar) C2DE (working class)

72% 87%

F (Farming)

13

VOTING INTENTIONS VS ELECTION OUTCOME AND POST ELECTION RECALL (Excluding don’t knows) April 07 Forecast

Fianna Fail

41

Fine Gael

Election Result

42

23

Post Election (Recall) July ’07 October ‘07

44

48

27

26 24

Labour Prog. Democrats Green

10 3

10

13

10 3

7 5

Sinn Fein

10

7

Ind/Others

7

7

3 0 8 7

1

3 6 8

14

12

APPENDIX ‘A’ TECHNICAL DETAILS A questionnaire covering the key topics was included in the Behaviour & Attitudes Barometer Survey on a bi-monthly basis since January 2002. The Barometer Survey is a syndicated project which allows client companies cost effective access to a large scale, nationally representative sample. The sample for the survey comprises 1,000 adults (i.e aged 15 and over), quota controlled by all of the normal demographic variables to correctly reflect the known characteristics of the adult population of the Republic of Ireland. Quota controls are applied in respect of sex, age, social class, region and area of residence (i.e urban or rural). The survey is conducted on a fortnightly basis with a freshly drawn sample of respondents on each occasion. All interviewing is carried out on a faceto-face basis (in-home) by trained members of the Behaviour& Attitudes fieldforce, working under supervision, and within the guidelines set by the Marketing Society of Ireland and ESOMAR (the European Market Research body). All of the data are reported in aggregate form only in this document (i.e. reflecting the perception of the total adult population) but the data can be looked at for discreet demographic groups as well (i.e. for men versus women, younger versus older, middle class versus working class etc.). In its current format the data can be reported with a confidence level of + or – 3%. The structure of each sample of 1,000 is as follows: Sex:

Male Female

49% 51%

Age:

15-24 25-34 35-49 50-64 65+

22% 20% 24% 20% 14%

Class:

AB C1 C2 DE F

13% 25% 23% 28% 11%

Region:

Dublin Rest of Leinster Munster Conn/Ulster

30% 24% 28% 18%

Area:

Urban Rural

60% 40%

13

APPENDIX B THE QUESTIONNAIRE

SECTION ‘ ’ - ECONOMY ASK ALL RESPONDENTS Now some questions about the economy in general and how you are faring at present Q.1

Q.2

Q.3

Q.4

Q.5

Q.6

Q.7

Q.8

Thinking about the economy as a whole, do you think that the country is better off, worse off, or about the same as last year? And what about the coming year, do you think that the country will be better off, worse off or about the same as this year?

Do you yourself feel better off financially, worse off financially or about the same compared to last year?

In terms of your own economic well-being over the year ahead, are you more confident, less confident or is your confidence about the same as last year?

Do you expect your income in the next year, after inflation and taxes, to be higher, lower or the same as in the last twelve months?

Do you expect your assets (your house, shares, pension entitlements, savings) In the next year to be higher, lower or the same as in the past year? PROBE: A lot or a little

In the year ahead, do you expect to purchase more, less or the same amount of goods and services as in the past year?

Do you expect to save more, less or the same amount in the year ahead compared with the last twelve months?

Better off

1

Worse off

2

The same

3

Better off

1

Worse off

2

The same

3

Better off

1

Worse off

2

The same

3

More confident

1

Less confident

2

No change

3

Higher

1

Lower

2

The same

3

A lot higher

1

A little higher

2

No change

3

A little lower

4

A lot lower

5

More

1

Less

2

The same

3

More

1

Less

2

The same

3

14

SECTION ‘ ‘ - VOTING ASK ALL RESPONDENTS 18 YEARS + Q.1

Q.2

We had a general election on 24th May 2007, did you vote in that election

Yes No

IF YES To which party did you give your first preference vote, or was it an independent candidate?

Fianna Fail

01

Fine Gael

02

Labour

03

Progressive Democrats

04

Sinn Fein

05

The Green Party

06

Independents

07

1 2

Others (SPECIFY) ___________________

08

Don’t know/Can’t remember

09

Refused

10

15

Appendix ‘C’ – Extract from the April 2007 report on The Impact of the Economic Climate on the Election Outcome. 4. SUMMARY In summary, there is unequivocal evidence that the state of consumer confidence in regard to economic matters was very much more favourable to the Government in 2007 than was the case in 2002. This is evident if we summarise the key indices for the month of May 2002 (the last election) and April 2007, immediately before our most recent election.

SUMMARY OF INDEX SCORES April 2007 vs May 2006 May 2002

April 2007

Improvement ’07 vs ‘02

National Economy

%

%

% Pts

Î

Looking back

-34

+1

+35

Î

Looking forward

-26

-11

+15

-20

+6

+26

+3

+18

+15

+11

+27

+16

-6

+4

+10

-19

-5

+14

Personal Finances Î

Looking Back

Î

Looking Forward

Assets Purchase Plan Savings

While there were concerns “bubbling under” about the prospects for the economy in general, voters tended to distance themselves (and particularly their prospects for the future) from this general trend. This would seem, to us, to have been a major factor in determining the final election outcome. Damage had undoubtedly been done to the incumbent Government by non-economic matters which tended to be the focus of media commentary which, quite understandably pays particular attention to more recent events.

16

However when voters come to make up their minds on Election Day, they are quite capable of distilling their assessment of the totality of the performance of a Government. The seeds of Fianna Fail’s remarkable performance may have been set two years earlier. The Progressive Democrats must wonder how they failed to share in the kudos.

17

5. VOTING INTENTIONS As was mentioned earlier, we have been collecting voting intentions data on the consumer confidence tracker since November 2004. We deliberately did not publish these data at the time, because of the fact that there are so many existing published polls on voting intentions. If anything, one extra poll was more likely to confuse rather than illuminate matters. For the record however, the voting intentions claims from our Barometer survey over that time were as follows:

B&A Barometer Voting Intentions (Excluding Don’t knows) Nov 04

Fianna Fail

40

Fine Gael

Jan 05

Mar 05

May 05

46

44

47

21

18

23

July Sept Feb 05 05 06

39

39

22

23

43

22

Mar 06

42

43

12 2

4 10

Sinn Fein Ind/Others

9

2 3 9 9

12

13

11 2 4 9 9

10 2 3

7

10

2 6 9 9

12 3

2

11 11

42

22

14

41

42

23 20

10

12 3 7

10

2

10

1

2 5

2 5

2 5

5

46

Election Results

24

10 14 1 6

40

22

20

20

Labour Prog. Democrats Green

July Sept Jan Apr 07 07 06 06

May 06

27

10

4

3 5

8

8

7

8

9

10

10

7

9

9

9

10

8

7

7

7

J.6395

2

In overall terms, the election result turned out to be very close to our final poll which was undertaken 5 – 6 weeks before the election. The variation in first preference voting for the individual parties is within sampling tolerance in all cases bar one. We underestimated the share of vote attributable to Fine Gael. This is a pattern that applies to other poll data also. The Irish Times/TNS/mrbi poll, for example, adjusts its claimed voting intentions, to make allowance for this anticipated bias.

18

There is no unequivocal explanation as to why this should be so. A personal interpretation is that Fine Gael supporters tend to be somewhat more reticent about “pinning their colours to the mast”. In other words we suspect that a higher proportion of Fine Gael supporters suggest to pollsters that they are undecided when, in reality, they have made up their minds but are a bit more “shy” about divulging their allegiance . Interestingly, the predicted share of vote for Fianna Fail, Labour, the PDs and independents all turned out to be extremely accurate. The two parties that were overstated in our final poll (admittedly 5 to 6 weeks before the election) were the Greens and Sinn Fein. We suspect that there are different influences at work here. Before we address that however, we need to look at the impact of consumer confidence on voting intentions. Having reviewed the various indicators of consumer confidence we suspect that the prime driver was probably expectations in regard to personal finances for the year ahead. We have combined the data for the last four surveys (from July 06 to April 07) to examine voting intentions for three groups of people separately: those who expected their personal finances to improve (28% of the population), those who felt they would stay static (62%) and those who expected that their personal finances would diminish (10%).

19

Not surprisingly, there are marked differences in voting intentions between these three groups, as can be seen here:-

VOTING INTENTIONS (B&A Confidence Monitor July 06 – April 07)

Share of voters

Expectation for personal finances next year Higher Same Lower (28%) (62%) (10%)

32%

Fianna Fail

46%

43%

28%

Fine Gael Labour Prog. Democrats Sinn Fein Green Ind/Others

22% 21%

9%

11% 2%

3% 8% 7% 6%

9%

15% 3%

5%

12% 2%

9%

8%

If the balance of consumer confidence had been different (in other words if substantially more people were expecting a reduction in their personal circumstances than an increase) it is undoubtedly the case that Labour and Fine Gael would have had a much higher share of the vote; to the point where they most certainly would have won. One interesting anomaly, in light of the way matters have panned out, is the fact that support for the Green party was highest among those who were expecting an improvement rather than a disimprovement in their personal circumstances. These are the very people who would have been most caught in a dilemma on Election Day. This may serve to explain why; in the final analysis, the share of vote for the Greens was lower than would have been predicted from our poll data. That cannot be the explanation for the apparent late collapse in the Sinn Fein vote. Some commentators have attributed this to what was seen as a poor performance by Gerry Adams, in the television debate prior to the election. We suspect that the problem was more subtle than this.

20

All of the polls were in agreement that the Sinn Fein vote was a very young one. Our final two polls, for example suggested a potential Sinn Fein vote, within the individual age groups, along the following lines:

SINN FEIN FIRST PREFERENCES X AGE GROUP

15-24

19%

25-34

12%

10%

35-49

6%

50-64

65+

3%

(Source: B&A Polls Jan & April 2007)

Poll data over the years has consistently shown that younger people are less likely than average to turn out to vote. We suspect that this was a major problem for Sinn Fein. We have included a question in our next tracker to establish whether people voted or not in the election, and who they claim to have voted for, in retrospect. We would be willing to make a small wager that this will show that the Sinn Fein vote suffered as a consequence of a low turn out by young voters: the people they were primarily depending upon for support.

21