Indian consumers’ confidence rises in July says BluFin study

ndian consumers’ confidence level rose in July on expectations of improved job security, says a study by financial services provider BluFin.

The BluFin’s Consumer Confidence Index (CCI) rose to 41.1 in July from 40.3 in June.

The index is a key ‘aggregate’ indicator that assesses the pulse of urban Indian consumers with regard to the economy, spending behaviour and employment. The index reflects pessimism at below 50 score and optimism above that.

The consumer confidence index has been continuously rising since December 2011 except for a dip in June this year.

Last month, it had declined due to fall in employment sentiment and subdued spending behaviour.

“After what seemed like a bottoming-out in December 2011 the CCI had been rising steadily until June 2012 when there was a marginal decline. The good news is that the July 2012 CCI has shown a slight improvement thereby averting the fear of a downward trend,” BluFin CEO Rashid Bilimoria said.

“While the urban Indian consumer is still very concerned about price levels, there has been an improvement in consumer sentiment towards spending across four key categories: durables, two-wheelers, four-wheelers and homes. Overall, the urban Indian consumer is feeling slightly better about his/her current situation and future prospects,” he added.

A sub index, which rates employment sentiment, is showing some signs of strengthening compared to last month. It has improved from 46.1 to 47.1, slowly pushing its way towards the neutral mark. The improved employment sentiment can be attributed to an improvement in the job security outlook.

Another sub-index, which measures future expectations, was at 38.5, indicating consumers were still pessimistic about the economy’s prospects. However, consumers were more comfortable about their present situation with a score of 47.4.

Spending sentiment index has improved by 0.9 points over the previous month to 27.9. Furthermore, sentiment towards inflation too has improved by a slight margin of 0.3 points to 26.3.

In terms of geography, Mangalore and Hyderabad lead the consumer sentiment score at 53.4 and 50.1 respectively and are the most upbeat cities. Kochi, Nagpur and Ludhiana are the most pessimistic cities with scores of 31.9, 31.2 and 31.1 respectively.

The Index is based on nation-wide monthly surveys of 4,000 respondents across 18 cities conducted by TNS.