Sentiment on job security and availability improves in urban India
ZyFin Research's Consumer Outlook Index was at 46.6 in January 2015, up by 10.6% compared to January 2014. The Consumer Outlook Index (COI) is a measure of consumer sentiment in urban India based on outlook towards employment, inflation and spending plans. The improvement in sentiment is primarily due to strengthening outlook towards job security and expectations regarding rising household income. Also, inflationary expectations among Indian consumers have declined significantly. Close to 30% of the consumers surveyed, expected Inflation to cool down over the next 6 months compared to just 23% who thought so in January 2014.The Consumer Outlook Index, a barometer for consumer confidence, reflects current and future spending plans, employment and inflation outlook of urban Indian consumers. It is based on a monthly survey of 3,000 consumers in 11 cities across India. A score above 50 reflects optimism, while below 50 is an indication of pessimism. In December 2014, of the 11 cities surveyed, 7 showed improvement over the previous month.
Key Highlights of the ZyFin Consumer Outlook Index for December 2014:
ZyFin Research's Consumer Outlook Index was at 46.6 in January 2015, up by 10.6% compared to January 2014. The sentiment is recovering quicker in smaller Indian cities than in metros. While the Year-on-Year growth in Metro cities was 6%, it grew at 17% in smaller tier 1 and 2 cities, possibly due to prospects of an expanding manufacturing sector concentrated in these regions.
With sentiment on employment and income recovering, consumers' interest on big ticket spending is also rising. As high as 38% resondents in January 2015 were planning to buy a home within the next 6-12 months. 41% respondents said they have plans to buy home appliances over the next few months. The comparable numbers were 33% and 35% respectively in Jan 2014.
Giving his views on the ZyFin Consumer Outlook Index numbers for the month of December, Mr. Debopam Chaudhuri, Chief Economist, ZyFin Research, said, Although Consumer Outlook Index continues to remain in the pessimistic sub 50 territory, the steep rate of recovery observed in the data over the last few months suggests that Indian consumers are growing confident and within a span of another 2-3 months the data should breach 50 level and start reflecting optimism. Optimistic consumers are a key contributor to generate sustained growth in a domestic spending driven economy.
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