The consumers’ overall confidence index dipped to -21.2 points as at the third quarters of 2020(Q3,2020), down by 25.0%, from 3.8 points it recorded in the corresponding period last year. This is according to the latest Consumer Expectations Survey Report for Q3, 2020
What this means: The slip in outlook indicates that consumers were pessimistic in their outlook for Q3 2020. Respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income.
Why this matter: The pandemic negatively impacted consumers’ income and businesses. Hence, the CBN wanted to gauge the impact of this pandemic on their confidence and outlook, both in the past and going forward, through their quarterly survey.
Other Key Highlights:
- The unemployment index for the next 12 months remained positive at 35.4 points in Q3 2020, indicating that consumers generally expect the unemployment rate to rise in the next one year.
- With indices of 20.8 and 5.3 points, consumers expect the borrowing rate to rise and anticipate the naira to appreciate in the next 12 months.
- Overall buying intention index in the next twelve months stood at 29.7 index points, indicating that most consumers do not intend to buy big-ticket items in the next 12 months. The buying intention indices for consumer durables, motor vehicles and house & lot were below 50 points, which shows that respondents have no plans to make these purchases in the next twelve months.
What you should know
The Overall consumer confidence index is computed as the average of the three indices, namely: Economic Condition, Family Financial Situation and Family Income.
a. Economic Condition refers to the perception of the respondent regarding the general economic condition of the country.
b. Family Financial Situation refers to the level of savings, investments, other assets including cash at hand and outstanding debts.
c. Family Income includes primary income and receipts from other sources received by all family members as participants in any economic activity or as recipients of transfers, pensions, grants, and the like