The Conference Board Consumer Confidence Index® rebounded in July, following a decrease in June. The Index now stands at 135.7 (1985=100), up from 124.3 in June. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – increased from 164.3 to 170.9. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 97.6 last month to 112.2 this month.
“After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers are once again optimistic about current and prospective business and labor market conditions. In addition, their expectations regarding their financial outlook also improved. These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.”
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was July 18.
Consumers’ assessment of present-day conditions improved in July. Those claiming business conditions are “good” increased from 37.5 percent to 40.1 percent, however, those saying business conditions are “bad” also increased slightly, from 10.6 percent to 11.2 percent. Consumers’ appraisal of the job market was also more favorable. Those saying jobs are “plentiful” increased from 44.0 percent to 46.2 percent, while those claiming jobs are “hard to get” declined from 15.8 percent to 12.8 percent.
Consumers were more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions will be better six months from now increased from 19.1 percent to 24.0 percent, while those expecting business conditions will worsen declined from 12.6 percent to 8.7 percent.
Consumers’ outlook for the labor market was also more upbeat. The proportion expecting more jobs in the months ahead increased from 17.5 percent to 20.5 percent, while those anticipating fewer jobs decreased from 13.9 percent to 11.5 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement increased from 20.5 percent to 24.7 percent, while the proportion expecting a decrease declined from 7.5 percent to 6.3 percent.
Source: July 2019 Consumer Confidence Survey®
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John Grant, Partner at MIDAS Aviation, notes that Virgin Atlantic’s announcement that they will drop services to St Lucia has probably come after a serious game of airline/destination poker as the requirement of an inevitable revenue guarantee that supports such services came around for renegotiation. But with St Lucia also served by British Airways is this a case of pragmatic acceptance by Virgin that perhaps a three times weekly service just wasn’t worth the investment and ensuring a daily service crucial.
As the table below shows, St Lucia was hardly a Caribbean star for Virgin Atlantic. On a revenue per hour basis the LGW – UVF service has been the poorest performing sector to the Caribbean for Virgin by some distance and whilst US$ 16.7 million route revenue is not to be dismissed, the contribution would seemingly always require some form of subsidy and support.
Table 1 – Virgin Atlantic Selected Caribbean Route Revenues May 2018 – April 2019
Source: OAG Traffic Analyzer
And interestingly with some US$14.5 million of the route revenue being generated from the UK area of sale and only US$ 821,468 from St Lucia that amounts to around US$ 2,053 originating from the destination market each flight; equivalent to around 3 passengers!
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.