Q1: Anticipated economic improvement drives CBN’s consumer confidence

RESPONDENTS to the Central Bank of Nigeria (CBN), consumer confidence index have identified increase in net household income and anticipated improvement in Nigeria’s economic conditions as drivers of their positive expectations.

The Consumer Expectations Survey (CES) for Q1 2018 obtained from the CBN website over the weekend was conducted during the period of March 16 to 27, 2018, covering a sample size of 2,070 households drawn from 207 Enumeration Areas’ (EAs) across the country.

The CBN’s consumer outlook for the next quarter and next 12 months were positive at 20.8 and 28.5 points, respectively.

“This positive outlook could be attributed to the expected increase in net household income, the anticipated improvement in Nigeria’s economic conditions, and expectations to save a bit and/or have plenty over savings in the next 12 months,” the survey report stated.

However, the report noted that consumer also attributed a moderation in outlook in the first quarter to worsening economic condition and family financial situation.

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The consumers’ overall confidence outlook worsened in the first quarter (Q1) 2018, as fewer consumers were optimistic in their outlook.

The index at -6.4 points was 23.0 points lower than the index in the corresponding period of 2017. The bank observed.

On price changes in the next 12 months, most respondents expect the prices of  goods and services to rise in the next 12 months with an index point of 16.2 points. The major drivers are: education, transportation, medical care, house rent, electricity, and food & other household needs.

The overall buying conditions index for consumers in the current quarter for big-ticket items stood at 34.3 points. This indicates that majority of consumers believed that the current quarter was not the ideal time to  purchase big-ticket items like consumer durables, motor vehicles among others.

According to the Central Bank of Nigeria, “economic condition” refers to the perception of the respondent regarding the general economic condition of the country, while “family financial situation” refers to the level of savings, investments, other assets including cash at hand and outstanding debts.