Consumer confidence best in 6 mths

Consumer confidence best in 6 mths

After six months of negative sentiment, consumer confidence has rebounded to a six-month high riding on the festival season. The consumer pulse rate rose by 3.4 points in the Bluefin Consumer Confidence Index, the highest increase since October 2011. A reading below 50 indicates pessimists outnumbering optimists. The rising score of the past two months and the slight uptick compared with the previous year could be an early sign of the consumer sector eventually bottoming out and making way for a recovery. Even spending sentiment has improved slightly, with consumers willing to splurge, albeit a little, this festival season. The employment index, which had been subdued for the entire year, has also improved now. No mid-year hikes and slow job creation and uncertainty in the economy had pushed this index to its lowest level in October last year. Over the last six months, people in North India have been most pessimistic about the employment scenario. However, this improvement in self assurance doesn’t mean the Indian consumers are finally an optimistic lot. The consumer confidence index for November was still at 41.6 which represents a slightly pessimistic range. Only a score above 50 will be able to lift the shadow of pessimism. The jury is still out on whether this suggests that consumers are finally feeling confident or not. “It is highly likely that the overall upward trend of the BluFin Consumer Confidence Index is a seasonal spike owing to the festive season. However, there are early signals pointing towards a bottoming out in the confidence score. This initial observation can be confirmed if similar trends are observed in December as well,” said Rashid Bilimoria, CEO, BluFin. Experts believe that the one thing that has the potential to change the consumer sentiment is decline in inflationary pressure. Stubbornly high prices are the biggest drag on the consumer spirits. In fact, the inflation sentiment index has reached its lowest level in the past two quarters.