ZyFin Sees Consumers Spending Uptick This Festive Season

Consumer Outlook Index up on better employment prospects and softer interest rates

ZyFin unveiled its monthly Indian consumption survey- Consumer Outlook Index. The Consumer Outlook Index (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.

ZyFin's Consumer Outlook Index stood at 47.4 during October, 2015 recording its highest since the beginning of this calendar year. The Index had scored 46.9 during September, 2015. Improving sentiments towards employment prospects and lower inflation expectations has triggered this uptrend observed since January, 2015. A softer interest rate regime prompting cheaper borrowing costs also added luster to consumer sentiment.

Key highlights

The Employment Sentiment Index rose by 2.8% (m-o-m) to 57.4 during October, 2015 on enhanced employment prospects and job security. Geographical diffusion of the index indicated convalescent employment opportunities in Lucknow, Mangalore, Delhi, Ahmedabad, Mumbai, Chennai, Hyderabad, Bengaluru, Indore and Guwahati in descending order. However, expectations of growth in employable opportunities in Kolkata remain muted.

The Spending Sentiment Index, a proxy for demand creation in the economy remained steady at 40.6 during October, 2015 as compared to 40.7 during the previous month. Favourable economic scenario coupled with conducive employment projections exhibited comfort towards making steep purchases. North India and South India have been congenial towards lavish purchases while West India and East India remain skeptical.

Consumer sentiments towards economic conditions stood at 68.5 during October, 2015 registering an improvement of 2.2% (m-o-m) on stable economic prospects of the nation.

Giving his views on ZyFin's Consumer Outlook Index for the month of October 2015, Debopam Chaudhuri, Chief Economist, ZyFin, said, Recent sales data on vehicles and durables corroborate the fact that the 2015 festive season has started off on an improved note compared to the last 3 years. Based on the ZyFin COI trend, we expect the rest of the festive season to continue to witness augmented consumer spending as confidence on economic recovery gathers momentum

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