Consumer sentiment remains for the second straight month at its highest levels since the summer of 2010. Significantly more positive expectations regarding personal financial situation and a fall in unemployment are the main reasons for the improved consumer climate since the beginning of the year.
The Consumer Climate Index – CCI (64.7) for the second consecutive month stood at its highest level of the past 42 months (9/2010-2/2014), remaining unchanged relative to the previous month. The two component indices showed opposing trends. The Current Economic Conditions Index – CECI (46.8) registered an increase of 3.4 points compared to January, whilst in contrast, the Consumer Expectations Index – CEI (76.6) fell slightly (-2.4 points) in the space of a month.
Propensity to buy (71.8, +5.4 points relative to the previous month) reverted to the levels of last June, with 1 in 3 respondents (32%) considering that the current period is appropriate for major purchases of household equipment (furniture, electrical appliances, etc.). Assessments of personal financial situation (21.8) improved marginally (+1.3 points) compared to January, with 81% of citizens estimating that their personal financial situation has deteriorated over the past 12 months. Expectations of personal financial situation (56.6, +3.5 points compared to the previous month) reached a new historical high for the period since the signing of the Memorandum (5/2010-2/2014). It is noteworthy that the relevant index registered an increase for the fourth successive month (11/2013-2/2014). Its total gains since last October exceed 10 percentage points (10.7).
The improvement in the expectations of households regarding their financial situation, as recorded over the past four months, is mainly due to the decrease in the percentage of those anticipating a deterioration in personal financial situation during the next 12 months. More specifically, those expecting an improvement in their personal financial situation rose by 4% (from 6% in October 2013 to 10% in February 2014), while the proportion of those anticipating a worsening of their personal financial situation decreased by 8% (from 61% in October 2013 to 53% in February 2014).
In contrast with the above indices, optimism about the future of the economy declined markedly. Short-term expectations (66.8) fell by 3.8 points relative to the previous month, whilst long-term expectations (106.3) dropped even more (6.8 points). Some 21% of citizens foresee a recovery of the economy during the coming 12 months and 39% expect such a recovery over the next five years.
Expectations for unemployment improved for the third straight month. The percentage of citizens expecting a decline in unemployment over the next 12 months reached 17%, the highest level since October 2009, after registering an increase of 4% relative to the previous month. Over the past three months this index has gained 9% in total (rising from 8% in November 2013 to 17% in February 2014). Expectations for saving showed little change. Just 6% (-1% relative to January) hope they will be able to save some amount of money in the year ahead. Lastly, expectations about inflation showed a slight improvement, with the proportion of citizens anticipating a decrease in prices in the year ahead reaching 13% after registering an increase of 3% in one month.
