UBS with the note:
UBS EL bullish consumer survey; UBS above-consensus on consumption in 2022
UBS Evidence Lab surveyed ~1,000 people from August 20 to September 9 in the 9th wave of our quarterly consumer survey. Despite lockdown, the Q3 results were even more positive than Q2. 1) The strong survey; 2) combined with resilient activity & labour market) data; and 3) less uncertainty on re-opening previously led us to upgrade our forecast for real consumption in 2022 to 4.1% y/y, or ~½%pt above consensus (with GDP also raised to 3.0% y/y). In this note, we add key sector and stock implications.
Middle & low-income earners drive broader upswing than the last ‘re-opening’
Distinct to the first ‘re-open trade’, when high-income earners drove the bullish pivot in consumer intentions, in Q3 the lift is driven by middle ($48k-$120k) & lower (<$48k) income earners, to near their pre-COVID level. Actual and planned savings intentions also increased to around a survey high. However, there was an even larger jump in households financial outlook over the next year to a record high. This was underpinned: 1) especially by rising house prices/wealth; 2) as well as favourable (i.e. low) interest rates; and 3) resilient assessment of the outlook for jobs and income. Hence, spending and debt intentions (both mortgage and consumer) again surged to record high levels.
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