- Survey Shows Sustained Rise in Consumer Confidence
The NOI Polls has put the level of its Consumer Confidence Index (CCI) for second quarter 2017 at 64.8-points.
This represented an increase of 2.1-points when compared with 62.7-points obtained in the first quarter of 2017.
The Consumer Confidence Index reveals consumers’ tendencies to spend, which is directly proportional to their expectations for a general improvement in the country’s economic conditions, employment opportunities, personal financial strength and stability in the prices of goods and services.
According to the survey, the slight leap in the confidence of consumers in Nigeria could have influenced their propensity to purchase with a degree of optimism about the overall state of the economy.
This optimism could be linked to some improvements in policies in recent times which have propelled the nation’s economy into the path of recovery in Q2, 2017, although, in a slow pace.
Some of the policies include improvement in foreign exchange, Ease of Doing Business, the Executive Orders, amongst others according to The Business Confidence Monitor (BCM) that was released recently by the Nigerian Economic Summit Group (NESG) recently.
In addition, the report showed that there were two variables that make up the CCI- the Present Situation Index (PSI) and the Expectation Index (EI).
The PSI and the EI both experienced an increase of 3.8-points and 0.9-point respectively when compared to the result obtained in Q1, 2017.
In February 2014, NOI Polls introduced its portfolio of indices; the NOIPolls Personal Well-Being Index (PWBI), the NOIPolls Consumer Confidence Index (CCI) and the NOIPolls Eagle 30 Business Confidence Index (EBCI).
Nigerian businesses, financial and government agencies largely depend on their perceptions and micro assessment of consumers’ expectation in making decisions. At best, they draw conclusions on the business environment based on information from their immediate surroundings while the minorities conduct surveys that are time and money consuming. However, the introduction of these indices provides indicators that will ensure stakeholders can detect and respond to changes in consumer behaviour, the economy, and the business environment in Nigeria.
Furthermore, the NOI Polls’ Current Economic Situation Index increased from 39.5-points in Q1, 2017 to 42.2-points in Q2, 2017. Although this index experienced an increase of 2.7-points, it still indicates that consumers are somewhat not satisfied with the country’s Current Economic Situation.
“The Expectation of the Country’s Economic situation index is one of the highest indices and it increased by 0.9-point from 93.5-points obtained in Q1, 2017 to stand at 94.4-points. This portrays a high optimism about the improvement in the country’s economic situation.
“The Current Employment Condition improved from the average (50-points) position in Q1, 2017 to stand at 53.4-points in Q2, 2017 representing a significant 3.4-points increase.
“The Expected Employment Condition Index remained the same (98.4-points) as the result obtained in Q1, 2017, signifying that Nigerians are still optimistic in terms of their expected employment condition,” it added.
In addition, it showed that the Current Prices of Goods and Services Index experienced the highest increase of 5.3-points in this quarter to stand at 18.8-points from 13.5-points recorded in Q1, 2017. Though, it remained the lowest index, the increase observed in Q2, 2017 revealed negativity in the country’s market developments, meaning that prices of goods and services are increasing.
Also, the Expectation of Prices of Goods and Services Index increased by 3.6-points from 76-points in Q1, 2017 to stand at 79.6-points in Q2, 2017 and this shows that consumers are optimistic that there will be a reduction in prices of the goods and services in the future.
The Expected Total Family Income Index was the only variable that experienced a decline of 0.8-point to stand at 67.1-points. This assumes that consumers are, to some degree, skeptical about their expected total family income which is capable of weakening the spending powers of consumers.