More often than not national economic data doesn’t really tell the story of our small local economy but this week, while many commentators were surprised by the reported jump in consumer confidence I believe it does reflect the mood here in the Highlands.
The 8% jump in confidence nationally, which is the highest level achieved in the past 13 months, is explained as being a response to the 21% fall in petrol prices since December, the unexpected but welcome drop in interest rates and a nearly 10% jump in the share price index.
The same research identified a 9.7% increase in the proportion of people who say now is a good time to buy property and a 6.9% rise in house price expectations.
Perhaps it is no wonder the level of activity in the local property market continues to be very strong with enquiries high from genuine buyers with access to finance. It’s exciting times.
But what then to make of news overnight that unemployment has skyrocketed to the highest rate in over a decade? Should we all be worried the announcement yesterday will dampen the fiery confidence in the property market?
Certainly prolonged high unemployment rates can negatively impact the level of confidence in the market but it I think the numbers released this week show that won’t happen overnight. Confidence remains strong.
The danger is that talking about what will happen if we lose confidence can actually result in confidence dropping. It can be a self-fulfilling prophecy so be careful not to overthink it.
Of course I like to follow the numbers and read the commentary but I do so in the context of what I know to be happening ‘on the ground’ in the market around me. I don’t actually need to read that confidence is high because I see evidence of it every day as potential buyers walk into my office.
My advice to everyone out there perhaps getting the jitters about discussions around a possible drop in confidence is to allow the economic commentary to reinforce the reality, not create it.