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Improvement in job security, income levels raise consumer confidence

Our Bureau New Delhi | Updated on February 19, 2015 Published on February 19, 2015

Inflationary expectations among Indian consumers have declined significantly, along with rising income and job security, according to COI.

ZyFin Research - a macro-analyst firm's Consumer Outlook Index (COI) for January 2015 has risen to 46.6, up by 10.6 per cent compared to January 2014. The improvement in sentiment is primarily due to strengthening outlook towards job security and expectations of rising household income. 

The COI is a measure of consumer sentiment in urban India based on outlook towards employment, inflation and spending plans. 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. In December 2014, of the 11 cities surveyed, 7 showed improvement over the previous month.

Inflationary expectations among Indian consumers have also declined significantly, according to COI. Close to 30 per cent of the consumers surveyed, expected inflation to cool down over the next 6 months compared to just 23 per cent who thought so in January 2014.

The sentiment is recovering quicker in smaller Indian cities than in metros. While the year-on-year growth in metro cities was 6 per cent, it grew at 17 per cent in smaller tier 1 and 2 cities, possibly due to prospects of an expanding manufacturing sector concentrated in these regions.

With sentiment on employment and income recovering, consumers’ interest on big ticket spending is also rising. As high as 38 per cent respondents in January were planning to buy a home within the next 6-12 months, as compared to 33 per cent in January. About 41 per cent respondents said they have plans to buy home appliances over the next few months, last year the percentage was 35.

Published on February 19, 2015
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