Urban India Consumer Outlook Index improves to 42.1 in January-ZyFin Research

3rd consecutive monthly uptick; reaches highest level since December 2012

The Consumer Outlook Index, which reflects current and future spending plans, employment and inflation outlook of urban Indian consumers, has registered a score of 42.1 in January 2014, an uptick of 2.0 points over the previous month, according to ZyFin Research. A score above 50 reflects optimism while below 50 is an indication of pessimism.

ZyFin Research's Consumer Outlook Index is India's monthly barometer of consumer sentiment. The index is based on a monthly survey of 4,000 consumers across 18 cities.

Key Highlights of the ZyFin Consumer Outlook Index for January 2014

The Consumer Outlook Index (COI) has been improving consistently since hitting an all-time low of 39 in October 2013. At 42.1 in January 2014, the index is now at its highest level since December 2012.

The rise in COI is driven by better Employment Sentiment Index, which has moved back into optimistic territory, to 51.3 points. This jump, of 1.5 points, can be attributed to declining pessimism around the unemployment rate and job security.

There was no significant change in the Inflation Sentiment Index, which fell by 0.5 points to 23.8 in January 2014. Although a rising number of consumers believe that prices will not worsen, they are worried that interest rates will increase.

The Spending Sentiment Index dipped marginally by 0.9 points to 32.0. This decline, despite improving macro-economic sentiment, indicates that consumers are in wait-and-watch mode. Until broad macro-economic indicators strengthen further, they will remain cautious.

Giving his views on the ZyFin Consumer Outlook Index numbers for the month of January, Mr. Debopam Chaudhuri (VP Research, ZyFin Research)said, The third consecutive uptick in the COI is further evidence that the Indian economy has bottomed out. With consumers gaining confidence in the economy, we expect a more sustained recovery over the next couple of months, as aggregate demand rises.

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