Report shows consumer confidence faltering

CONSUMERS are beginning to fear fall out as a result of the credit crunch, a new report has revealed.

A study by professional services firm Deloitte and YouGov shows that confidence is faltering with around 60% of around 1,900 adults questioned saying that the current market turmoil will have a negative impact on the UK's competitive position.

Nearly half believe it will have a slight negative impact on the competitive position of the UK economy, while 14% believe it will have a significant negative impact.

Along with anticipating knock-on effects of the recent market turmoil, the UK population feels increasingly threatened by companies' offshoring business operations.

More than 35% said they felt that companies should be forced to bring jobs back to the UK compared to 32% last year, with a further 40% believe moving jobs away from the UK to be a bad idea.

When asked which countries pose the biggest challenges to the competitiveness of the UK economy over the next five years, China is by far seen as the biggest threat (72% of respondents – 76% last year); followed by India (41% – 48% last year) US (31% – 34% last year) Japan (25% – 32% last year) Germany (21%) Russia (19% – 18% last year) and South Korea 18% (27%).

Those working in finance and banking sector see offshoring as the biggest threat to their jobs (41%) followed by IT & Telecoms (36%).

The increasing numbers of workers migrating to the UK is seen as the biggest threat by those working in transport (49%), retail (48%) and food & agriculture (42%).

John Kerr, managing partner for innovation at Deloitte, said:

“It's clear that recent turmoil in the financial sector and continued plans for reducing costs by offshoring is shaking the confidence of those working in the sector.

“However this is also the sector where most people believe the UK will become 'world leaders. This can happen if UK is in a position to benefit from operations moving offshore through the reinvestment of the cost savings to develop the high value end of the business.”

He added that there were reasons to be positive. Over 33% of respondents believe that the UK is most likely to become a world leader in financial services, followed by media and creativity (25%), professional services (21%) and the arts (21%) over the next 10 years.

People also said that the financial services sector will also provide the best job opportunities over the next 5-10 years.

That said, 72% of respondents said they would relocate overseas if it would improve their quality of life.

After the weather property prices are the biggest driver for people considering moving overseas followed by the prospect of cheaper retirement costs.