MNI India Consumer Sentiment Indicator: India Consumer Confidence Loses Momentum In July - Consumers Less Upbeat About The Future

Indian consumer sentiment fell in July in a broad based deterioration which saw lower optimism towards personal finances, the business environment, employment and the real estate market.

The MNI India Consumer Sentiment Indicator decreased 2.6% on the month to 111.6 in July, offsetting last month’s pickup which had left confidence running at a nine-month high of 114.7. The decline in consumer sentiment was led by a fall in consumers’ assessment of long-term business conditions and a deterioration in households’ expectations about their financial situation over the next year.

Expected Personal Finances fell 4.2% to a five-month low of 110.3 in July while the Current Personal Finances Indicator was down 2.1% to 104.4. With these two measures down on the month, panelists were less keen on spending on leisure activities over the next three months and they also revised down their expectations for car purchases over the coming year. 

The deterioration in consumers’ balance-sheets in July came amid growing concerns about the outlook for jobs. Consumers’ views about the labour market over the next year worsened for the third consecutive month, with the Employment Outlook Indicator falling to a series low of 100.1 in July. 

Consumers were also less upbeat about the current business environment, with the indicator slipping back below the 100 neutral level where it has been for seven of the past 12 months. This impacted negatively on sentiment towards both short and long-term business conditions, with the indicator of the latter falling to a series low. 

On a positive note, buying conditions for spending on big-ticket items improved for the third consecutive month. Durable Buying Conditions rose to a 22-month high in July while the indicators for buying conditions for IT products, phones and other appliances also increased between June and July. 

Most measures in the survey, including the headline India Consumer Sentiment Indicator, worsened over the past month, however, they show a better picture relative to the lows seen at the beginning of the year.