25% of respondents say job market improved since Modi elected
Consumer sentiment rose slightly in January as consumers' willingness to purchase big-ticket items improved, although this contrasted with a further deterioration in their views on personal finances and the wider business environment in the short-term.The MNI India Consumer Sentiment Indicator rose 1.2% to 109.8 in January from 108.5 in December. While sentiment increased further above the 100 level, meaning optimists outnumbered pessimists, it has fallen 8.8% over the past year and stands 9.5% below the series average.
Following four consecutive declines in headline sentiment, the latest survey provides a tentative sign of stabilisation. Despite their wavering confidence in household finances, prices and the general economy, households have been relatively upbeat about the purchasing environment. The Durable Buying Conditions Indicator, which measures consumers' willingness to purchase a large household good, rose to 113.5 in January, the highest since September 2014. Should this optimism continue it could prompt a turnaround in overall consumer spending.
More optimistic views on the buying environment contrasted sharply with perception of the current business environment which deteriorated further in January. Respondents also revised down their expectations for business conditions in a year's time, although they expected business conditions would improve over a period of five years.
When asked about the status of the job market since the Modi government came to power, respondentshad mixed views. About a quarter of respondents thought that the job market had improved, with a mention of the "Make in India" program, compared with 14.4% who thought that it had worsened. A higher proportion, 27.6%, said that there had been no change in the employment market, while 32.6% of respondents were uncertain about the impact of the government's policies on the job market.
Commenting on the latest survey, Chief Economist of MNI Indicators Philip Uglow said, "This was the first increase in the MNI India Consumer Sentiment Indicator since August last year and in that respect it is most welcome. Whether it marks an end to the sharp decline in sentiment seen throughout 2015 is nother matter. While more positive views on buying conditions would usually point to higher consumer spending ahead, it sits against a backdrop of weak and still falling sentiment on personal finances and the current business environment."
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