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Debt reduction boosts North East consumer confidence

Sentiment has increased amongst consumers in the North East, as more people are able to pay off debts and put money into savings.

Consumer sentiment has reached its highest levels since the third quarter of 2011, after 23% of people in the North East said things had improved and 55% of households said they were in a position to save.

Deloitte’s survey said that while sentiment was still weak, it had improved amongst consumers, with concerns over disposable income reducing from 47% to 40% in the last quarter.

Improved employment statistics and heightened job security has resulted in only 13% of households claiming their circumstances had worsened over the last three months, in comparison with 22% last quarter.

Paul Feechan, Deloitte’s North East Consumer Business lead partner, said: “Consumers remain cautious, but the results of the most recent consumer tracker points to a reduction in the stress on the household, with consumers more positive about their income, employment and working hard to reduce their levels of debt.

“However, this brighter outlook is tempered with caution as there is no evidence yet of a significant loosening of the purse strings.”

The surveyor said clearer indications will be seen when people start spending on holidays and white goods.

Mr Feechan said: “This will be key to whether we see continued growth in consumer spending in 2013.”

Higher grocery prices and utility bills are a major concern for consumers for 2013, while transport costs are also a worry for the coming year.

Despite these worries, debt levels are expected to decrease, as 22% of consumers said they would be able to pay of owed money, while 16% expect their debts to increase.

This was posted in Bdaily's Members' News section by Miranda Dobson .