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World And Pakistan Consumer Confidence Survey

The month of March global consumer confidence Primary Index has risen to 50.6, tying the record high set in January 2018 since Ipsos started tracking in 2010. The Primary Index is a measure of consumer attitudes in 24 countries regarding the current and future state of local economies, personal finances, savings, and confidence to make large investments, as measured monthly by Ipsos.

These findings are based on data from Thomson Reuters/Ipsos’ Primary Consumer Sentiment Index (PCSI) collected in an ongoing survey that has conducted 17,500 interviews monthly since January 2010.

Nine countries saw a significant increase in their Primary Index score, with South Africa, Turkey, Hungary, Brazil, France, the US, Belgium, Great Britain, and Poland all seeing an increase of at least 1.5 points or more. The most significant changes were seen in South Africa (+7.4), Turkey (+3.3), and Hungary (+3.2). Argentina (-5.7), Russia (-2.2), and Saudi Arabia (-2.1) saw the largest decreases in their Primary Index scores.

Once again, China (70.3), India (65.0), Sweden (63.9) and the US (62.8) scored the best marks among the 24 countries included in the index. Russia (40.8) has broken out of the list of countries scoring below 40 and now leaves Italy as the lone country with an index below 40 at 38.6.

Three subsets of the Primary Index, the Jobs Index reflecting perceptions of job security, the Investment Index, reflecting perceptions of the investment climate, and the expectations index, reflecting perceptions of future economic expansion, are up globally.

March’s global Ipsos Jobs Index (57.7) has risen 0.4 points over the past three months and has risen 2.8 points since this time last year.

Belgium (61.0) experienced the largest Jobs Index gain over the last three months with an increase of 4.0 points. Conversely, Argentina saw the greatest decline, seeing their index fell 5.0 points to 49.1.

The US (71.8) has taken the position with the highest Jobs Index mark, a distinction held by Sweden (71.1) in last month’s poll.

China rounds out the top three with an index of 71.0. Brazil (34.7) continues to record the lowest Jobs Index score among the 24 countries surveyed.

The global Expectations Index score saw the largest increase and now stands at 59.6, up 1.4 points over the last three months. Ten countries saw significant increase of at least 1.5 points including South Africa, up an incredible 16.3 points to 63.3, Hungary, up 5.7 points to 59.6, and Turkey, up 4.3 points to 49.5. France (+2.3), Brazil (+2.1), Great Britain (+2.0), Italy (+1.8), Mexico (+1.7), US (+1.7), and Australia (+1.5) round out the list of significant increases.

Three countries recorded decreases of 1.5 points or more, with Argentina (-3.9) experiencing the largest drop. China (73.8) and India (71.1) report the highest Expectations scores, while Turkey (49.5) reports lowest.

The global Investment Index shows a 3-month gain of 0.5 points, and is now up to 44.3.

Seven countries saw gains of 1.5 points or more with the largest ones in South Africa (+4.7), Brazil (+3.8) and The US (+3.3). Despite the overall increase in the global Investment Index, five countries dropped in this month’s Index.

Argentina reported the most significant decrease of 6.4 points. China (68.7), India (66.7), and Sweden (61.2) are the highest scoring countries.

Four countries reported scores under 35, with Italy (28.9) and Russia (33.3) reporting the lowest Investment Index scores.

These findings are based on a rolling average of data from Thomson Reuters/Ipsos’ Primary Consumer Sentiment Index (PCSI) collected in a monthly survey of consumers from 24 countries via Ipsos’ Global @dvisor online survey platform.

For this survey, Ipsos interviews a total of 17,500+ adults aged 18-64 in the United States of America, Canada, and Israel, and age 16-64 in all 21 other countries each month.

The monthly sample consists of 1,000+ individuals in each of Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Spain, Great Britain and the USA, and 500+ individuals in each of Argentina, Belgium, Hungary, India, Israel, Mexico, Poland, Russia, Saudi Arabia, South Africa, South Korea, Sweden and Turkey.

Data collected each month are weighted so that each country’s sample composition best reflects the demographic profile of the adult population according to the country’s most recent census data.

Data collected each month are also weighted to give each country an equal weight in the total “global” sample. Online surveys can be taken as representative of the general working age population in Argentina, Australia, Belgium, Canada, France, Germany, Great Britain, Hungary, Italy, Japan, Poland, South Korea, Spain, Sweden, and the United States. Online samples in Brazil, China, India, Israel, Mexico, Russia, Saudi Arabia, South Africa and Turkey are more urban, more educated and/or more affluent than the general population and the results should be viewed as reflecting the views of a more “connected” population.

Pakistan Consumer Confidence

In Pakistan, Consumer Confidence Index (CCI) covers households’ perceptions relative to the last six months and their expectations for the next semester, including personal financial conditions, overall economy, unemployment and consumption of durable goods.

The index is based on the stratified random telephone survey of more than 1600 households across Pakistan. The survey is conducted by the Institute of Business Administration (IBA), Karachi and State Bank of Pakistan (SBP) every two months since January of 2012.

Consumer Confidence in Pakistan decreased to 47.61 Index Points in May from 48.32 Index Points in March of 2018. Consumer Confidence in Pakistan averaged 42.07 Index Points from 2012 until 2018, reaching an all time high of 51.08 Index Points in March of 2017 and a record low of 29.05 Index Points in May of 2012.

Pakistan Consumer Confidence was projected to be 171.69 Index Points in May 2018 according to a Trading Economics poll. According to the TE survey, 83 percent of users expected the value to be higher than the previous release while 17 percent of participants forecasted a decrease.

 

Consumer Confidence At An All-Time High In Pakistan

Consumer confidence reached an all-time high increasing by nine points in July-September 2017, according to the Nielsen Global Survey of Consumer Confidence and Spending Intentions.

The survey data highlights a positive perception of job outlook, increasing from 47 percent in the second quarter to 57 percent in the third quarter.

The number of respondents optimistic about the state of their personal finances has gone up by two percentage points from the second quarter to 66 percent, resultantly immediate-spending intentions has reached 49 percent, compared to 46 percent in the second quarter 2017.

“The nine-point upsurge in Pakistan’s consumer confidence score depicts an improving outlook for the country,” noted Quratulain Ibrahim, managing director, Nielsen Pakistan. Since Nielsen launched the survey, this has been the highest number reached to date. We can attribute the score to many different reasons, such as the growth of our agricultural sector, controlled inflation, strengthened power supply and most importantly the uplift in our job market.

There has been an increase in large-scale manufacturing — notably the automotive industry. Pakistan is flourishing and is rated as one of the top growth markets in the Middle East and Africa region. Although there has been a one percentage point dip in job security being the biggest concern over the next six months, it still remains the top concern amongst 21 percent of Pakistani consumers.

Consumers are spending more on vacations and technology in third quarter three, suggesting they have more disposable cash.

Established in 2005, the Nielsen Consumer Confidence Index is fielded quarterly in 63 countries to measure the perceptions of local job prospects, personal finances, immediate spending intentions and related economic issues of real consumers around the world.

Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.

Amid rising per capita income and controlled inflation, isn’t it a bit odd that consumer confidence in Pakistan has been declining lately and now stands at an 18-month low.

This is what the latest reading of the bimonthly IBA-SBP consumer confidence index (CCI) tells us in January 2018.

Globally, there is debate over whether consumer confidence is a leading or lagging economic indicator. In Pakistan’s context, it is likely a leading indicator, for there is no other plausible label for the trend-line of the SBP-IBA CCI survey.

The latest CCI reading came in at 45.7 – a 3.5 percent drop over November 2017. Ominously, this diffusion index is down 10 percent from a year ago, when, at 50.6, the CCI diffused net optimism about the economy.

Pessimism is slowly seeping in. The SBP, in its latest quarterly report, didn’t sound alarmist over domestic demand and the consumers who are driving it.

It did cite inflationary pressure as a rationale to raise the policy rate after many rounds of maintaining the status quo. Folks are apparently anticipating higher inflation in the future, and that seems to be primarily driving the growing pessimism.

As per the survey report, inflation expectations also rose across the board – for food, energy and the rest – as 88.1 percent of respondents expected inflation to increase in the next six months, higher than the 83.7 percent who thought the same in November 2017.

The lean economic spell on the back of low commodity prices is over. As global crude prices rebounded, petroleum prices at home have been raised in recent months. Also, worsening rupee-dollar parity has raised concerns about imported inflation. That led the central bank last week to raise the policy rate after many rounds of status quo, to “preempt overheating of economy and inflation breaching its target rate”.

Other, more tangible indicators in the survey also exude pessimism in their respective diffusion indices.

Compared to the last reading, views about rise in unemployment and interest rates grew. Purchasing intent over next six months (for durables and cars) dropped.

The outlook for better household financial conditions in next six months dropped, though coming in at a net positive at 52.7.

It may not be all gloom and doom in the next six months. “The impact of any depreciation this time around would not be too inflationary as domestic prices are already higher than global averages”.

Petrol and diesel prices may continue heading north, but its cascading effect on higher electricity and gas tariffs may be blocked by a government so close to heading to a general election.

OICCI Survey Finds Improved Business Confidence

The Business Confidence Index survey, conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI) twice a year, found an eight percent improvement in business confidence.

The index that considers various indicators found business sentiments 21 percent positive as compared to 13 percent recorded in the survey in May.

Overseas Investors Chamber of Commerce and Industry President Khalid Mansoor said the current positive business sentiment should not be taken for granted as it is ‘strongly’ co-related with good governance “that needs to be supported by a progressive, transparent, consistent and predictable policy framework.”

Mansoor advised the government to become more proactive and expedite critical interventions on all issues hindering investment and economic activities including foreign direct investment and export. “There is an urgent need to focus on addressing the country’s very poor rating of 147 out of 190 countries in the recently issued World Bank’s 2018 ease of doing business report, down from 144 in 2016 and way below the 75 rating of Pakistan in 2010,” he said in a statement.

The survey is conducted through field interviews in all the four provincial capitals, Islamabad and key business towns across the country. It is a feedback from representatives of all business segments in Pakistan, including retail marketplace, and covers roughly 80 percent gross domestic product.

The Overseas Investors Chamber of Commerce and Industry has 195 members from 35 different countries, representing 14 economic sectors and contributing over one-third of Pakistan’s total tax revenue.

The sentiments of the leading foreign investors, represented by the Overseas Investors Chamber of Commerce and Industry members and who participated in the survey, also recorded a five percent increase to 42 percent.

Retail and wholesale trade sector led an upswing with 40 percent positive sentiment in the survey, up 27 percent in the six months period.

The manufacturing sector followed suit with a 16 percent positive sentiments, showing a substantial increase of seven percent, while the service sector with 15 percent recorded a marginal decline of three percent.

Chemical/cement sector grew 41 percent; financial services 30 percent, nonmetallic 23 percent and food sector 21 percent. Transport and communication and automobile sectors registered modest growth rates of 12 percent and seven percent, respectively.

The Overseas Investors Chamber of Commerce and Industry attributed the overall index increase to improvement in global perception and business environment as well as an expected rise in capital investment over the next six months.

“These views of the survey respondents were largely based on improvement in security, law and order and the overall economy, increased consumer demand, better business alliances, decline in the energy crises and decrease in fuel prices and low inflationary pressure on various other products,” it said.

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