Rising Prices Hit Consumer Confidence

14 04 2008

Consumer Confidence weakened in March. The Consumer Confidence Index (CCI) retreated 4.5% to 76.7, after recording a slight increase in February. Both components of the CCI declined: the Present Situations Index (PSI) fell by a hefty 8.3% to 55.2 while the Expectations Index (EI) declined by 2.7% to 92.9. A number of concerns have weighed on consumers in recent weeks, including rising prices of basic foodstuffs, higher prices of goods, weakness in the job market and natural disasters such as flood.

Nonetheless, consumer confidence improved in two of the six regions surveyed in March. The CCI in Jakarta rose slightly by 0.7% to 82.4 and the CCI in Central Java added 5.9% to 81.2. Of the regions where confidence deteriorated, the biggest decline in the CCI was seen in East Java (where the CCI slipped 12.1% to its lowest ever level of 65.1). Consumers in this province cited an increase in basic foodstuff prices and a lack of jobs as their major concerns.

At the same time, confidence weakened in both rural and urban areas (the CCI for the former group fell by 2.6% to 77.9, while the CCI for the latter group dipped 5.3% to 76.3). As such, it seems that urban consumers are suffering more than rural consumers from the increases in basic foodstuff prices. Read the rest of this entry »