Consumer confidence stays on the recovery path, says RBI survey

Manufacturers remain confident about demand conditions

The households expect improvements in general economic and employment conditions to continue over the next one year, according to the Reserve Bank of India’s (RBI) consumer confidence survey.

Reserve Bank of India's forward-looking survey said the confidence in future income conditions was, however, a shade lower vis-à-vis the previous survey round, following four successive rounds of improvements.

Consumer confidence has continued its recovery path on the back of respondents' improved assessment of the general economic situation and the employment condition.

The reading on the current situation index (CSI) improved further to 95.1 in January 2024 from 92.2 in November 2023. The latest round of the survey by RBI was conducted during January 2-11, 2024, covering 6,058 respondents. Female respondents accounted for 53.1 per cent of this sample.

The survey collects current perceptions (vis-à-vis a year ago) and one-year-ahead expectations of households on the general economic situation, employment scenario, overall price situation, own income, and spending across 19 major cities.

Separately, in the Industrial Outlook Survey, manufacturers remained optimistic on demand during the quarter ending March 2024 (Q4 FY24). However, the confidence was relatively lower when compared to the previous survey round.

Input costs are likely to increase, though the pressures are likely to be lower. In synchrony with the positive demand prospects, selling prices and profit margin are expected to rise. The business expectations index (BEI) remained elevated at 130.3 in (Q4 FY24), though it moderated from 135.4 in the previous quarter.

Manufacturing companies were highly optimistic about production, capacity utilisation, order books, employment conditions, and overall business situation in the first half of the next financial year (April-September 2024).

The input cost pressures are likely to persist during H1 FY25 and selling prices are expected to move in tandem, the survey added.