(Newswire.net — June 4, 2016) — There seems to be a bit of controversy as to whether or not the economy is really recovering as the government and many analysts have led consumers to believe. With the GDP up slightly, it would appear that the economy is once again growing but consumer spending tells another story altogether. Some merchants are in panic mode based on the latest figures released in May 2016 and so many are looking for ways to compensate for the general lack of consumer confidence. If a recession is just around the corner, many retailers are seeking ways to keep costs low until consumer confidence is restored.
A Large Part of the Problem
In recent years a greater number of shoppers have been using credit cards to help them make it through from pay check to pay check and although this enables them to buy more with less disposable income, merchants are left paying a higher price. Credit card processing fees are reducing the amount of profit many retailers are realizing but without accepting plastic, there would be no way many of their customers would be able to make purchases. This is a large part of the problem and one that could quickly put many small businesses in jeopardy if a solution isn’t found. With reduced spending and high credit card fees, merchants might be forced to stop accepting plastic altogether. The only workaround is to find a credit card processing company that offers low fees to merchants.
What Is Affecting Consumer Confidence?
In order to determine whether or not this is just a temporary bump in the road towards recovery from the 2009 recession, many analysts are trying to determine exactly what is affecting consumer confidence. It appears as though China and the EU are at the root of worry as their respective economies continue to decline. Some market analysts feel that consumers are just being cautious after being caught off-guard when the Great Recession sent markets around the world tumbling.
GDP Not as Strong as Anticipated
One of the key indicators that has many concerned is the fact that the GDP is not as strong as had been forecast at the end of 2015. All hopes had been that there would be a strong rise in the amount of products manufactured and sold in the first half of the current year but consumers are not buying at levels forecast and exports are also down. It could be that a problematic economy in the EU has slowed production and exports but it could also be a lack of confidence in the UK as well.
While Britons are being reassured by the government that the economy truly is on the mend, consumers are still not spending as they should be in an economy that is growing. So is the economy really recovered? It is difficult to say at this early date and with conflicting forecasts among leading market analysts. Some predict an even greater recession than the 2009 market collapse whilst others say this is a temporary bump and the economy will continue to climb once again. With so many conflicting forecasts, merchants are best advised to keep costs low until a definitive pattern has been established.