Consumer Confidence Survey:
September 2012 (Round 10)*
The Consumer Confidence Survey of Households for
the July-September 2012 quarter (10th round), provides
an assessment of the consumer sentiments of urban
households across 6 cities based on their perceptions of the
general economic conditions and their own financial
situation. The assessments are analysed in two parts, viz.,
current situation as compared with a year ago and
expectations for a year ahead.
While sentiments about current and future economic
conditions have been declining over the last four quarters,
for the first time in this survey, the net response on
perceptions about current economic conditions turned
negative. There has been a noticeable drop in the positive
perceptions on household circumstances, income and price
level. However, due to sharp rise in proportion of
respondents reporting increase in spending as compared
to a year ago, the Current Situation Index in September
2012 remained by and large same as that of last quarter.
In contrast, there has been a sharp decline in Future
Expectations Index due to all constituent factors.
I. Introduction
The Reserve Bank has been conducting the
Consumer Confidence Survey of households on a
quarterly basis since June 2010. The survey captures
qualitative responses on various parameters of
economic conditions and household circumstances.
The 10th round of the survey was conducted in
September 2012.
II. Sample Coverage
The survey covers six metropolitan cities, viz.,
Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai and New Delhi. Each city is divided into three major
areas and each major area is further divided into three
sub-areas. From each sub-area, about 100 respondents
are selected randomly. In each round of survey, 5,400
respondents are selected (900 respondents from each
city). For the current round, out of the total 5,400
survey schedules, 5,124 schedules were found to be
suitable and included in the survey results.
III. Structure of the Survey Questionnaire
The survey schedule consists of questions on
qualitative perceptions on economic conditions, views
on household circumstances, income & spending,
price level, employment prospects and expenditure
on major items and interest rates. From this round
onwards, the survey captured additional perceptions
on future household circumstances, outlay for major
expenditures viz., motor vehicle, house, consumer
durables, current employment scenario and current/
future rate of price increase. The modified survey
questionnaire is given in Annex.
IV. Survey Results
IV.1 Economic Conditions
-
While sentiments about current and future
economic conditions have been declining over the
last four quarters, for the first time in this survey,
the net response on perceptions about current
economic conditions turned negative (Table 1).
-
The future outlook is more optimistic than current
economic conditions (Table 1).
IV.2 Household Circumstances
-
There has been a sharp drop in the positive
perceptions on household circumstances (Table 2).
-
This is the first time that the views of the
respondents on future household circumstances
have been added in the survey. The positive
perceptions on future household circumstances are slightly lower than that of current, however
the net response for current household
circumstances is lower than that of the future
(Table 2).
-
The major factors influencing the perceptions of
respondents on their views on household
circumstances are 'salary and business income’
and 'prices’ (Table 3).
Table 1: Opinion on Economic Conditions |
(Percentage responses) |
|
Current |
Future |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Improved/ Will improve |
59.2 |
50.7 |
49.6 |
37.5 |
62.3 |
58.7 |
55.5 |
44.4 |
Remained the same/ Will remain the same |
16.1 |
23.5 |
13.1 |
23.8 |
21.7 |
24.5 |
20.9 |
27.7 |
Worsen/ Will worsen |
24.7 |
25.7 |
37.3 |
38.7 |
16.0 |
16.9 |
23.6 |
27.8 |
Net Response |
34.5 |
25.0 |
12.2 |
-1.2 |
46.2 |
41.8 |
31.9 |
16.6 |
Table 2: Perceptions on Household Circumstances |
(Percentage responses) |
|
Current |
Future |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Sep-12 |
Become somewhat better off/ Will be better off |
57.7 |
56.5 |
57.1 |
45.0 |
44.1 |
Difficult to say/ Will remain the same |
18.1 |
15.0 |
7.8 |
26.2 |
34.7 |
Become somewhat worse off/ Will worsen |
24.2 |
28.6 |
35.1 |
28.8 |
21.3 |
Net Response |
33.5 |
27.9 |
22.0 |
16.2 |
22.8 |
IV.3 Income
-
The proportion of respondents reporting 'increase’
in current as well as future income has decreased
as compared to the last quarter (Table 4).
-
More than 35 per cent respondents feel that their
income has remained at the same level as that of
last year or would remain the same next year also
(Table 4).
Table 3: Major Factors Influencing Views on Household Circumstances |
(Percentage responses) |
|
Current |
Future |
Dec-12 |
Mar-12 |
Jun-12 |
Sep-12 |
Sep-12 |
Salary and business income |
87.3 |
85.7 |
85.2 |
81.0 |
83.1 |
Interest and dividend income |
46.9 |
34.2 |
32.1 |
26.2 |
23.2 |
Real estate sales |
24.3 |
27.2 |
20.7 |
22.5 |
21.1 |
Prices |
27.3 |
41.9 |
48.1 |
50.7 |
42.5 |
Change in value of assets |
26.6 |
27.3 |
19.0 |
21.9 |
19.1 |
The number of dependent in my family |
15.1 |
23.0 |
23.8 |
24.4 |
21.4 |
Note: As respondents may report multiple factors, total of percentage relating to factors may be more than 100. |
Table 4: Perceptions on Income |
(Percentage responses) |
|
Current |
Future |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Increased/ Will Increase |
58.7 |
55.2 |
59.5 |
47.8 |
64.0 |
60.7 |
65.0 |
51.9 |
Remained the same/ Will remain same |
25.8 |
30.7 |
15.9 |
36.1 |
29.1 |
33.8 |
27.5 |
37.8 |
Decreased/ Will Decrease |
15.4 |
14.1 |
24.5 |
16.1 |
6.8 |
5.5 |
7.5 |
10.3 |
Net Response |
43.3 |
41.1 |
35.0 |
31.7 |
57.2 |
55.2 |
57.4 |
41.5 |
IV.4 Consumer Spending
-
There has been a sharp rise in the proportion of
respondents reporting increase in spending as
compared to a year ago. As regards the future
spending, about 80 per cent respondents observed
that their spending would increase or would
remain the same (Table 5).
-
Net response on current spending has increased
substantially, whereas the same on future
spending has decreased (Table 5).
-
'Cost of consumer goods' and 'cost of services' are
the main factors influencing 'spending' as
compared to 'income' and 'cost of consumer
goods' in the previous round (Table 6).
-
Nearly one fifth of the respondents reported outlay
for expenditure on major items like motor vehicle, house or durable goods over the next one year,
whereas, more than two thirds respondents have
not planned for such expenditure (Table 7).
Table 5: Perceptions on Spending |
(Percentage responses) |
|
Current |
Future |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Increased/Will Increase |
71.8 |
74.5 |
74.7 |
83.6 |
63.0 |
55.7 |
61.0 |
57.9 |
Remained the same/ Will remain same |
16.2 |
12.5 |
5.8 |
13.0 |
26.5 |
33.7 |
25.0 |
22.4 |
Decreased/ Will Decrease |
12.0 |
13.0 |
19.4 |
3.4 |
10.5 |
10.7 |
14.0 |
19.7 |
Net Response |
59.8 |
61.5 |
55.3 |
80.3 |
52.5 |
45.0 |
47.0 |
38.2 |
Table 6: Major Factors Influencing Changes in Spending |
(Percentage responses) |
|
Income |
Future
Income |
Non-financial
Assets |
Financial
Assets |
Expenditure on
Real Estate |
Expenditure on
Consumer Durables |
No. of
Dependents |
Cost of
Consumer Goods |
Cost of
Services |
Dec-11 |
65.6 |
37.3 |
30.4 |
24.5 |
22.9 |
22.8 |
26.0 |
59.2 |
52.3 |
Mar-12 |
58.0 |
25.3 |
23.8 |
22.6 |
32.1 |
31.3 |
27.9 |
68.6 |
59.8 |
Jun-12 |
88.6 |
60.2 |
20.6 |
12.7 |
30.5 |
25.3 |
26.0 |
67.7 |
51.2 |
Sep-12 |
44.0 |
31.0 |
19.8 |
17.6 |
20.7 |
32.6 |
29.9 |
82.3 |
68.6 |
Note: As respondents may report multiple factors, total of percentage relating to factors may be more than 100. |
Table 7: Perceptions on Major Expenditure |
(Percentage responses) |
|
Motor Vehicle |
House |
Durable goods |
Yes |
18.6 |
17.4 |
20.9 |
Can't Say |
9.7 |
11.3 |
10.4 |
No |
71.7 |
71.2 |
68.7 |
IV.5 Price Levels and their rate of increase
-
Around 95 per cent of the respondents reported
that price levels had risen as compared to a year
ago and would continue to rise in the next year
(Table 8).
-
As the negative perceptions on the current and
future price levels have increased, the net responses on price levels of both have deteriorated
(Table 8).
-
Around 90 per cent of the respondents felt that
rate of current price rise as well as rate of future
price rise had increased (Table 9).
Table 8: Perceptions on Price level |
(Percentage responses) |
|
Current |
Future |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Increased/ Will increase |
91.0 |
86.2 |
91.9 |
96.3 |
90.9 |
85.4 |
90.8 |
94.9 |
Remained same |
8.2 |
9.9 |
7.2 |
3.4 |
7.9 |
13.6 |
8.4 |
3.6 |
Decreased/ Will decrease |
0.8 |
3.9 |
0.9 |
0.3 |
1.2 |
1.0 |
0.8 |
1.6 |
Net Response |
-90.2 |
-82.2 |
-91.0 |
-96.0 |
-89.6 |
-84.4 |
-90.1 |
-93.3 |
Note: Perceptions of increase in prices is considered to be negative sentiments and decrease in prices is considered to be positive sentiments. The net
responses are therefore, negative. |
Table 9: Perception on rate of change in Price Levels-September 2012 |
(Percentage responses) |
|
Current |
Future |
Increased/ Will increase |
90.0 |
89.9 |
Remained Same/ Will remain Same |
9.1 |
8.2 |
Decreased/ Will decrease |
0.9 |
1.9 |
IV.6 Perceptions on other Macroeconomic
Indicators
IV.6.1 Interest rate
-
The net perception of high interest rates from
borrowers' view point has declined as compared
with previous round. Similarly, net perception of
low interest rates from depositors' view point has
also declined (Table 10).
-
Overall, about one fourth of the respondents felt
that the interest rates were appropriate (Table 10).
IV.6.2 Employment Conditions
-
More than two fifths of respondents reported
improved current employment conditions and
improved prospects for future (Table 11).
-
Net response wise, future perception on
employment conditions is better than current
employment conditions (Table 11).
Table 10: Current Interest Levels from Borrowers' and Depositors' Point of View |
(Percentage responses) |
|
Borrower |
Depositor |
Dec- 11 |
Mar-
12 |
Jun-
12 |
Sep-
12 |
Dec-
11 |
Mar-
12 |
Jun-
12 |
Sep-
12 |
Is low |
4.2 |
4.3 |
6.2 |
7.8 |
78.5 |
76.8 |
77.2 |
66.2 |
Is appropriate |
15.0 |
15.9 |
18.9 |
24.5 |
15.2 |
20.0 |
20.4 |
25.4 |
Is high |
80.8 |
80.1 |
74.8 |
67.7 |
6.3 |
3.3 |
2.3 |
8.3 |
Table 11: Perceptions on Employment (Percentage responses) |
(Percentage responses) |
|
Current |
Future |
Sep-12 |
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Improved/ Will Improve |
42.8 |
50.5 |
43.6 |
50.8 |
43.6 |
Remained Same/ Will remain Same |
25.5 |
33.4 |
32.6 |
28.3 |
33.3 |
Worsen/ Will worsen |
31.7 |
16.0 |
23.8 |
20.9 |
23.1 |
Net Response |
11.1 |
34.5 |
19.8 |
30.0 |
20.5 |
IV.7 Current Situation Index and Future
Expectations Index
-
Current Situation Index (CSI), based on the
current economic conditions, current household
circumstances, current income, current spending
and current price levels, has overall remained at
same level mainly due to rise in current spending
compensating for fall in other indicators
(Table 12).
-
Future Expectations Index (FEI), based on future
economic conditions, future income, future
spending, future employment conditions and
future price levels, has substantially decreased as
compared with previous quarter. All components
of FEI have contributed to the fall in FEI
(Table 12).
Table 12: Current Situation Index and Future Expectations Index |
|
Dec-11 |
Mar-12 |
Jun-12 |
Sep-12 |
Current Situation Index |
116.2 |
114.6 |
106.7 |
106.2 |
Future Expectation Index |
120.2 |
115.5 |
115.2 |
104.7 |
. |