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Journalism of Courage
Consumer sentiment of the country has declined for the month of August highlighting significant concern about the future of Indian economy and its employment conditions, a latest survey by Boston Analytics said.
According to knowledge services firm Boston Analytics8217; Consumer Sentiment Index BACSI, a monthly barometer of the country8217;s consumer opinion regarding the current state and future expectations of the economy, household financial conditions and consumption for August has registered a 3.5 per cent decrease.
8220;The urban consumer in India is clearly telegraphing significant concern about the future of the Indian economy,8221; Boston Analytics8217; Director of Research and Development Sam Thomas said.
The BACSI for the month of August stood at 89.9, down 3.5 per cent from the previous months reading of 93.2, primarily because there was a fall in respondents8217; confidence in the economy and in employment conditions, the report said.
8220;Every sub-index within the BACSI composite index registered a decline in August. The primary drivers of the declining sentiment were fears of runaway inflation and concern about employment conditions,8221; Thomas added.
The BACSI Employment Sentiment Index stands at 67.5 for August, a marginal decrease of 0.4 per cent from the previous month8217;s level, the lowest since the inception of the index.
8220;Observation and expectation of increasing unemployment combined with decreasing confidence in creating alternative means of employment has negated the effect of increasing job security leading to a marginal decline in the BACSI Employment Sentiment Index,8221; the report added.
Meanwhile, the BACSI Real Estate Sentiment Index in August also declined, as the negative impact of increasing real estate prices outweighed the increasing construction activity, while the Consumer Spending Sentiment Index dipped by over 4 per cent mainly due to Inflationary pressures and the resultant decrease in spending.
8220;Inflationary fears appear to be the major driver of the pullback in consumer confidence,8221; the report said, adding that while consumer sentiment related to inflation improved in July, there was a significant drop in August.
However, there were differences underlying the aggregate consumer spending index. 8220;Despite inflationary pressure, consumer spending remains strong in Delhi, Mumbai, Chennai and Hyderabad, while respondents in Kolkata, Chandigarh and Nagpur have not reported ambitious shopping plans,8221; the report added.
The survey covers about 4,550 respondents across seven cities Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Chandigarh, and Nagpur and addresses variables reflecting the nations economic conditions. It measures indicators such as employment, inflation, interest rates and real estate.
Besides, studying micro-level variables such as household income, commitment towards expenditure on basic necessities, savings and other elements.
The index consists of two sub-indices the current situation index and the expectation index and five derived indices covering employment conditions, inflation, real estate, savings, and consumer spending.
