A consumer spending revival may be on its way for the second half of 2024, according to a recent survey by accountancy firm PwC.

The PwC Consumer Sentiment Survey – Summer 2024, revealed “favourable” economic indicators, combined with the highest consumer sentiment in three years, could fuel a more positive finish to the year for some retailers.

PwC states its index has historically been a “reliable” early indicator of future consumer spending patterns over the coming six to twelve months.

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Falling inflation, interest rate cuts and rises in wages, benefits and pensions were all cited as potentially easing the pinch for consumers, with household finances at their strongest for two years, according to PwC.

It found consumer sentiment has climbed to the highest level in three years, which could be a peak, with consumers reporting more money left over for luxuries or savings (up from 31% in June 2023 to 34% this year).

Interestingly, the gap between the most and least affluent consumers, which widened in the past year, has started to close, with only affluent groups reporting a decline in household finances compared to last quarter.

Looking ahead to spending, consumer intentions have improved across almost every category when compared to this time last year.

PwC found the “four H’s” of holidays, health, home and hobbies are the most prioritised discretionary spending categories.

All in all, the Sentiment Survey reported a positive outlook but consumers are still being careful with spending, with the same number of people (72%) planning to cut back in the next three months.

There are even signs that the more affluent consumers are being more careful with their spending, with increasing numbers of the most well-off socio-economic groups cutting back compared with earlier this year.

For retailers heading into the “Golden Quarter”, PwC states the indicators look positive going forward, but reports there are still lacklustre spending intentions.

In particular, it found big ticket, home and technology spending intentions are still lagging and PwC states there is no guarantee that improved sentiment will translate into higher spending.