Consumer Confidence Hits Lowest Level in More Than Two Years

5 02 2008

Consumer confidence sank in January to its weakest level since October 2005 as gloom over current economic conditions increased. The Consumer Confidence Index (CCI) fell 5.9% to 78.4 from 83.3 in December. It appears that the recent rise in basic foodstuffs prices hit consumers’ feelings about the current environment. Besides, job scarcity and kerosene fuel shortages are also all to blame for a 9.1% plunge in the Present Situations Index (PSI), its lowest level in seven months.

At the same time, the Expectations Index (EI) also weakened in January, down 4.3% to 92.1. As has been the case for the past several months, the main drivers of consumers’ increasingly pessimistic outlook is the continued expectations on rising prices, particularly basic foodstuffs prices, declining income prospects and worsening job outlook.

The latest survey shows that consumer confidence declined for rural households much more than for urban respondents. Note that consumers in rural areas have seen their incomes dry up as they wait for the next harvesting season. For rural respondents, the CCI slumped by 9.5% to 77.4, while for urban respondents, the CCI only fell by 4.4% to 78.8 in January. Read the rest of this entry »

Consumer Confidence Finally Recovers

7 12 2007

The Consumer Confidence Index (CCI), which had been in a downtrend since July 07, perked up in November to stand at a level of 86.5, up 5.2% over the previous month. Propelling the increase in the CCI was the 9.2% jump in the level of the Present Situations Index (PSI) to 68.3 after it had slumped to a four-month low of 62.5 in October. At the same time, the Expectations Index (EI) rose 3.3% to 100.2 from 97.0 in October, giving rise to hopes of a pick-up in consumer spending.

Declines in basic foodstuff prices and upbeat assessments on the overall state of the economy have helped to quell consumer concerns over the prospects for the economy in the months ahead. At the same time, consumers should spend more – especially on traveling – during the holidays at the end of the year. This should give a timely boost to the economy. Read the rest of this entry »