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Indian Consumer Confidence Drops

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Indian consumer confidence dropped in the first quarter of 2013 to become the second country after Indonesia due to the "environment around them", according to a survey by market insights and information provider Nielsen.

According to the survey, Indian consumer confidence index dropped by one point to 120 in the first quarter of 2013 after topping the global list at 121 in fourth quarter of 2012.

"The last year has seen shifting sentiment on confidence, where consumers are feeling good about themselves, but not the environment around them," Nielsen India President Piyush Mathur said in a statement.

He said the finding highlighted a contradictory nature of the urban Indian consumer.

"On one hand (Indian consumers are) cautious about the state of the economy, and middling company performance, but at the same time (they are) indicating a higher discretionary spending for the year," Mathur added.

Meanwhile, eight core sector industries' growth has slowed down to 2.9 per cent in March 2013 from 3 per cent in the same month in 2012 due to drop in production of coal and crude oil.

"The marginal decline in growth in March was on account of negative growth witnessed in the production of natural gas and low growth recorded in the production of coal and crude oil," an official release said on Tuesday, 30 April 2013.

Read Also: 8 Core Sector Industries Output Grew 2.9% In March

Indonesia led the global index in the first quarter of the year, measuring at 122, up five positions from the fourth quarter of 2012.

Philippines and Thailand were ranked third and fourth in the latest list, with 118 and 116 points, respectively.

Brazil came fifth in the list, holding on to its previous position.

As per the survey, 60 per cent of respondents in India indicated they would put spare cash into savings, up 6 per cent from last quarter.

Forty-two per cent said they would invest in new technology and products, up from 39 per cent last quarter, while 41 per cent reported they would spend spare cash on new clothes, a five point increase, it added.

"Consumers are looking to relax their budgets over the next few months and indulge themselves in updating their homes, taking vacations and enjoying entertainment," Mathur said.

At the same time, building up savings for the future with the retirement and mutual funds is a healthy indication of how Indian consumers are viewing this year, he added.

Further, in Q1 2013, 73 per cent indicated optimism about their job prospects in the next 12 months, three percentage points below 76 per cent in Q4 2012.

More than one in five respondents indicated job security as the biggest concern, up three points from Q4 2013. The state of the economy is the biggest concern for 12 per cent of respondents, as per the survey.

The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access in 58 countries.

Confidence Improves In 60% Of Markets Globally
Japan, where the central bank has aggressively boosted economic stimulus, reported its highest consumer confidence score since 2006 although Japanese were still very cautious about the outlook.

Global consumer confidence rose in the first quarter, with a marked increase in sentiment in the United States, Japan and northern Europe, the survey showed.

Consumers in Europe's south, where austerity imposed to tackle the region's debt crisis has helped push unemployment to record levels, remained among the most pessimistic.

Confidence improved in 60 per cent of markets globally, compared to only 33 per cent in the fourth quarter of last year.

By region, consumers in North America were most upbeat about their spending intentions for the next 12 months, with 42 percent of respondents there saying they planned to spend on discretionary items during the year. That was much higher than the North American average of 33 percent over the past three years and compared with 39 percent in the Asia Pacific region.

Canadians were in the top 10 most optimistic consumers in the latest poll but Nielsen was cautious about the outlook for consumers in the United States.

Portugal was the most pessimistic market, followed by Greece, although Greece's score improved from a quarter before.

"We suspect that fears of the European debt crisis spreading beyond recession-stricken southern European countries may have eased in the first quarter," said Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen.

"However, weak labour market conditions in troubled economies, including Greece, Ireland, Italy, Portugal and Spain, and the recent Cyprus financial crisis are further indications of the fragile state of the European economy, which continue to hinder a full recovery in the region."

Confidence fell in parts of the Middle East and Africa and dipped in Latin America. Egypt's reading plunged 20 points to 74 while in Saudi Arabia it fell by 17 points to 95.

The Nielsen survey was conducted between February 18 and March 8 and covered more than 29,000 online consumers across 58 markets.



(Agencies)
 


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