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Rising inflation and weak employment conditions among Indians have dragged Consumer Confidence Index down by 0.4 points to 41.4 points in April.
Employment Sentiment Index, which stood at 50.4, declined for the second straight month, registering a fall of 1.3 points, according to Blufin.
Present Situation Index, which measures consumer confidence in the current economy, decreased slightly by 0.1 points to 44.6, while Future Expectations Index, which measures consumer outlook for the next 12 months, also dropped by 0.5 points to 40.0, suggesting increasing pessimism about the future.
Commenting on the impact of wilting employment sentiment on consumer confidence, BluFin CEO Rashid Bilimoria said: “Hiring has failed to pick-up steam in the beginning of this fiscal on account of a fragile business environment. Weak manufacturing numbers coupled with a service sector slowdown, with bodies such as Nasscom scaling down hiring by 50,000 jobs, has not gone down well with the Indian consumer. Implementing structural reforms that could generate jobs is critical.”
The sub-components of Consumer Confidence Index other than Employment Sentiment Index have shown mild to moderate improvements in April. Inflation Sentiment Index has improved by 1.3 points to 27.2.
Moreover, an increasing number of consumers surveyed in April felt that the interest rates would decline further. With consumer sentiment around inflation improving and a declining interest rate regime, Spending Sentiment Index witnessed a marginal uptick of 0.9 of a point to 31.1.
Geographically, consumer confidence increased significantly in South India while declining in all the other regions. North India saw the steepest decline of all, 4.3 points in confidence levels. Spending Sentiment Index in North India is at an all-time low since October 2011.
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