NEW DELHI, July 11: Indian consumers’ confidence declined in June due to fall in employment sentiment and subdued spending behaviour, says a study by financial services provider BluFin.
BluFin’s Consumer Confidence Index (CCI) fell from 41.7 in May to 40.3 in June. The index witnessed a downward trend after improving for five straight months since January 2012.
The BluFin CCI 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 study is based upon interview of 4,000 urban consumers in 18 Indian cities, including metros and smaller cities.
“The drop in the CCI score might be beginning of a negative trend. The decline in the employment sentiment, which has been flat for the past six months, denotes that pessimism is also rising regarding employment, while spending sentiment and inflation sentiment continue to remain extremely subdued,” BluFin CEO Rashid Bilimoria said.
“Overall, the downturn is a cause of concern as the consumers continue to grapple with economic uncertainties and inflationary pressures,” he added.
A sub index, which rates employment sentiment was at 46.1, the highest month on month decline of 1.9 points. The decline in employment sentiment was mainly due to significant fall in confidence about personal job security among consumers. Besides, household income also worsened.
Another sub-index, which measures future expectations was 37.5, indicating consumers were still pessimistic about the economy’s prospects. Although, consumers were more comfortable about their present situation with a score of 47.1.
Spending sentiment index has dropped by 0.2 points over the previous month to 27, primarily due to declining interest in vehicle purchase especially passenger cars even as two-wheeler purchase intentions remained flat.
The report said that sentiment towards inflation seems to have stabilised, although at a very low level of 26.
In terms of geography, the north and southern region lead the consumer confidence levels with scores of 43.6 and 43.1 respectively.
Individually, Mangalore, Hyderabad and Delhi lead the consumer sentiment score at 53.9, 50.5 and 48.7 are the most upbeat cities while Kochi, Ludhiana and Nagpur are the most pessimistic at 31.5, 31.5 and 31.3 respectively. (PTI)
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