Rising living costs and economic growth slump is finally taking its toll over consumer sentiment. Consumer confidence has slipped by 2.9 percentage points in June 2019 due to reasons like the higher cost of living, said a report. There is an evident pessimism towards daily spends and investment, the Thomson Reuters-Ipsos report said. “The India Primary Consumer Sentiment Index (Consumer Confidence) has fallen by as consumers are reeling under high cost of living and feeling strapped for funds for daily spends and investments,” said the report adding that dismal economic performance is also one of the reasons for the same.
However, the same report also said that while consumer confidence plunged, the confidence in jobs has gained momentum after last month’s slump. “The PCSI Employment Confidence (“Jobs”) Sub-Index has bounced back after last month’s slump, and is up by 2 percentage points,” said Thomson Reuters-Ipsos report.
The falling consumer sentiment is alarming because consumer demand has already hit a slowdown in the previous few months. The same meant considerable losses for FMCG, automobile industries as their sales hit a major block. The current findings indicate that the problem is yet to be resolved.
Three out of four sub-indices, that are calculated monthly for the PCSI result, have dipped. Speaking on the report, Parijat Chakraborty said that mood is visibly downbeat among consumers. “So, while sentiment towards jobs has shown recovery, it has majorly slumped for spends, savings and investments; also, to some extent there is less confidence towards performance of the economy,” Parijat Chakraborty, Country Service Line Leader, Ipsos Public Affairs, Corporate Reputation and Customer Experience said.
The poll, which was conducted online, may not be reflective of the general population. However, “if the more urban, educated and those who have more income than their fellow citizens and often referred to as “Upper Deck Consumer Citizens” or Primary Consumers,” have dipping confidence, the situation could be even worse in the rural segment which was the key contributor in the slowdown.