Transcript Consumer Confidence Index Presentation
Consumer Confidence Index
What is it?
• Measures consumers sentiment about their personal financial situation and that of the country as a whole.
– Own financial situation (present and future) – Employment – Spending intentions – Assessment of the general economic conditions
The Rationale
• • • Personal consumption expenditure - driver of GDP growth Spending is a function of: – Current and expected income – Current and expected prices The CCI seeks to forecast consumer spending through a survey of consumer sentiment
Features of the CCI
• • • The CCI may be related to macroeconomic variables such as inflation Ex: Confidence is boosted by lower inflation, lower interest rates and higher real income (the reverse may also be true) Enterprises can make use of consumer confidence index
OECD Area
Consumer Confidence Index Real GDP growth
Consumer Confidence Measure Indicator
• • • Frequency: monthly Published at: ISET-PI web site ( http://www.iset-pi.ge/ ) Start date: May 2012
Consumer Confidence Measure Indicator
• • • • 300-350 interviewed respondents per month – Compared with: • U.S. - 5,000 respondents • Czech Republic - 1,000 respondents • Germany – 2,000 respondents Randomly generated mobile phone numbers Same person can not be interviewed twice during the year. Response rate: 80%
Measuring the Index
• 15 questions about: – Current financial standing of household , past and next 12 months – General economic situation, past and next 12 months – Consumer prices, past and next 12 months – – Employment conditions for the next 12 months Current saving environment, general – Saving intentions, next 12 months – Likelihood of purchasing a car, next 12 months – Likelihood of purchasing a house, next 12 months – Likelihood of making home improvements, next 12 months
Compiling the Index
• • •
= + −
The consumer confidence indicator is the arithmetic average of the balances (in percentage points) of the answers to those 15 questions.
How balances are calculated?
Q8: In view of the general economic situation, do you think that now it is the right moment for people to make major purchases such as furniture, electrical/electronic devices, etc.?
yes, it is the right moment now it is neither the right moment nor the wrong moment no, it is not right moment now N don’t know 25% 40% 35% 0%
•
Balance=25%-35%=-10%
(ignore 40% of neutral responses)
Compiling the Index
• In case of questions with five or six options Q14: Are you planning to buy or build a home over the next 12 months?
+ + Yes, definitely + Possibly − Probably not −− No N don’t know 10% 15% 30% 35% 10% Balance = (PP + 0.5P) − (NN + 0.5N) Balance=(10%+0.5*15%) − (35%+0.5*30%) =-32.5%
Compiling the Index
• Q2: How do you expect the financial position of your household to change over the next 12 months? It will...
+ + + get a lot better get a little better = − stay the same get a little worse − − get a lot worse N don’t know 15% 12% 28% 35% 7% 3%
Balance=(15%+0.5*12%) (7%+0.5*35%) =3.5% Note: Ignore neutral and don’t know answers
Compiling the Index
• We calculate following indices: – Overall CCI index – Present situation index – Expectations index
-10,0%
Consumer Confidence Index results
Consumer Confidence Index (CCI) -14,9%
-15,0%
-18,2%
-20,0%
-22,4% -16,2% -20,0% -18,5% -18,4% -23,4% -21,8% -16,8% -22,5%
-25,0%
-25,2% -26,3%
-30,0%
май.12
июн.12
-26,8% июл.12
-26,4% авг.12
сен.12
Overall CCI Present situation index Expectations index
40% 30% 20% 10% 0% -10% -20% -30% -40% -50% -60%
Consumer Confidence Index results
Consumer Confidence Index (on a scale of -100%; +100%):
Tbilisi vs. Rest of Georgia, September 2012
Tbilisi Rest of Georgia
-7% -1% 24% 28% -23% -22% -53% -53% Current financial situation (saving or borrowing?) Change in financial situation (last 12 months) Expected change in financial situation (next 12 months) Agregated Consumer Confidence Index
Consumer Confidence Index results
Compared to the past 12 months, do you expect to spend more or less money on major purchases?
September 2012 42% 36% 24% 27% 24% 19% 18% 20% 7% 2%
much more a little more about the same Secondary Higher a little less much less
Consumer Confidence Index Overall CCI Present Situation Index (2) Expectations Index (3)
1 How has the financial situation of your household changed over the last 12 months?
2 How do you expect the financial position of your household to change over the next 12 months?
3 How do you think the general economic situation in the country has changed over the past 12 months?
4 How do you expect the general economic situation in this country to develop over the next 12 months?
5 How do you think that prices have changed over the last 12 months?
Total -22.5% -16.8% -26.3%
-2.9% 26.6% 20.1% 32.7% -57.0% 6 how do you expect that prices will change in the next 12 months?
-5.4% 7 How do you expect the number of people unemployed in this country to change over the next 12 months?
8 do you think that now it is the right moment for people to make major purchases?
9 Compared to the past 12 months, do you expect to spend more or less money on major purchases?
10 In view of the general economic situation, do you think that now is it good or bad moment to save?
11 Over the next 12 months, how likely is it that you save any money?
-16.9% 4.0% -9.9% -12.4% -68.2% 12 What is current financial situation of your household, able to save or have to borrow?
13 How likely are you to buy a car over the next 12 months?
14 Are you planning to buy or build a home over the next 12 months?
-52.9% -64.0% -78.2% 15 How likely are you to spend any large sums of money on home improvements or renovations over the next 12 months?
-53.1%
September, 2012 m/m changes (1) -0.7% -1.9% 0.1% Tbilisi -23.2% -19.0% -26.0%
4.5% -7.2% 3.8% 4.4% 0.2% 5.2% 5.1% -22.1% -16.0% 2.1% -2.7% 6.7% -6.6% 7.7% 3.2% -5.9% 23.7% 11.9% 26.3% -62.4% -6.7% -19.1% 12.4% -15.5% -16.0% -62.4% -52.6% -55.7% -70.6% -54.1%
Rest of Georgia -22.1% -15.7% -26.4%
-0.6% 28.2% 24.6% 36.2% -54.1% -4.7% -15.7% -0.6% -6.9% -10.5% -71.3% -53.0% -68.5% -82.3% -52.5%
Our future objectives
• • • Implement the EU harmonized survey programme of Business and Consumer Surveys •
Industrial confidence indicator
•
Services confidence indicator
•
Retail trade confidence indicator
•
Construction confidence indicator Economic Sentiment Indicator
Industry - 40%, Services - 30%, Consumers - 20%, Construction - 5%, Retail trade - 5%