Indian consumer more confident than a year ago: Study

The improvement in sentiment is primarily due to strengthening outlook towards better job security and job availability along with expectations regarding rising household income.

Also, rising number of Indian consumers believe inflation to mellow down over the next 12 months thereby improving their standard of living. 35% of the consumers surveyed in February 2015, expected Inflation to cool down over the next 6 months compared to just 23% who thought so in February 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.  For February 2015, all metro cities surveyed show a rise in Consumer Outlook Index, for year on year basis.

Key Highlights of the ZyFin Consumer Outlook Index for February 2015:

·      ZyFin Research’s Consumer Outlook Index was at 47.2 in February 2015, up by 11% compared to February 2014. North India recorded an increase of 25%, maximum amongst all the regions. Sentiment in west is growing sluggishly, which coincides with Finance Minister’s plan of reformist agenda and financial assistance to the region in Budget-2015.
·      With overall sentiment on employment and income recovering, consumers’ interest on spending is also rising.  The spending sentiment grew by as high as 40% on year-on year basis. This is reflected in the data, as 42% respondents in February 2015 were planning to buy a home within the next 6-12 months. 45% respondents said they have plans to buy home appliances over the next few months.  The respective number for both during the previous month was 38% and 40%.

Giving his views on the ZyFin Consumer Outlook Index numbers for the month of February, Debopam Chaudhuri, Chief Economist, ZyFin Research, said, “Indian consumers who contribute to 60% of the GDP through domestic spending are once again gaining back their confidence on the economy. This is a precursor to rising demand across categories like real estate and automobiles.”