Consumer confidence rebounds

TNS's Economic Confidence Index (ECI) results staged an overall dramatic rise of nine points from the figure of 130 it held through the last six months of 2009 to 139 in the first quarter of 2010, reaching levels not seen for two years, the research company said.

The index is made up of two components: how people feel now about the economy, and their expectations for the next six months.

The latest study was conducted in the middle two weeks of February.

TNS said the reading for the current component - after a major fall in the third quarter of 2009 when the effects of the recession began to be most strongly felt - had risen strongly to 138 (from 114 in November).

This suggested that people were beginning to shake off the effects of the recession.

"This indicates a resilience amongst people and suggests that they will largely return to their pre-recession spending patterns," TNS said.

The expectations component continued its steady upward trend to reach 139 - the highest figure since measuring began in 2002.

TNS said the rise in the current component of the ECI had been fuelled by two strong improvements -  people perceived their economic circumstances to be better, and they felt that business conditions were looking up.

"While these perceptions occur across all demographics, the strongest improvement is among poorer people," TNS said.

The improvement in the expectations component was due to improved sentiment around inflation going forward, and about business conditions and  job availability.

"While this rise in February is largely triggered by an improved confidence among more wealthy people, the expectations index is at levels very close to its all-time high for poorer people and is at its all-time high for wealthier people."

 - Sapa