JWT London is pleased to announce the launch of the third wave of its Austerity Index report, and to accompany it, a brand new microsite featuring a selection of interactive data. On it you will be able to see all three waves of our proprietary index figure and its component metrics, split out by ten demographic groups. The site also features up to date information on which categories consumers are trading up, down and out of as well as where they are making sacrifices. Click here to explore the site.
Meanwhile, what does our latest wave of the report reveal about Britain’s on-going battle with austerity? Well the press may be heralding the first green shoots of recovery, but our data suggests that this is making little difference to the amount in people’s pockets. Despite double the number of people to last wave reporting that they think Britain is now in recovery, many are still struggling with the mounting cost of living. In fact almost half (49%) report having between nothing and £50 left to spend at the end of each month. With so little – or no – disposable income, 99% are still taking measures to adapt to austerity in some way.
Yet consumer spending is up; between April and June this year it increased 0.3%. And our ‘Efforts to Restrict Spending’ Index figure reflects this shift, falling 81 points since Wave 2. Visit the ‘Metrics over Time’ section of the microsite to see a visual representation of this change wave on wave. Whilst this is still small-scale movement in the greater scheme of things, it does suggest that consumer confidence is building slowly.
But this reality is restricted to the wealthier members of society. Indeed, looking at the Index over time on the site shows the difference between the Austerity Index measure for our highest income group (those earning £40k or more) and the lowest (£20k or less) has diverged significantly this wave. There is a difference of 251 points. This finding is supported by recent analysis by Manchester University’s Centre for Research on Socio-Cultural Change (CRESC) which shows that London and the south-east have recovered more rapidly than other regions of the UK, and that those on higher incomes have become more prosperous since the crash compared to middle and low-earners. This polarisation is not going unnoticed either; 81% agree that austerity has deepened the social divide in our country.
Tracey Follows, Chief Strategy Officer at JWT London said:
“Whilst recovery is being led by a small group of well-off people, the majority are still stuck in the quagmire of austerity. The effects of recovery are not yet trickling down to the hardest hit. They will still need support from brands and companies for some time. Our assessment is that recovery and austerity are not mutually exclusive – the two now walk hand in hand.”
And not just on an individual basis, people are calling for greater support at a community level: 66% want support for local businesses in their community/sector, and 65% want brands to fund initiatives in the local community. Evidently efforts to help even out the sharp divisions in society created by austerity will be well received.
You can download the full report here.
Notes to Editors:
800 UK adults surveyed in September 2013 using the JWT SONAR panel.
About the JWT Austerity Index:
The JWT Austerity Index is an in-depth quarterly research survey that analyses the impact of prolonged economic adversity on UK consumers and markets. The Austerity Index aims to diagnose Britain’s emotional and rational reply to austerity, delivering the answers that brands and organisations need today.
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