publicissue
Economic Barometer – Consumer Climate Index (CCI) – June 2014

13.JPG

Consumer confidence remains, for the third straight month, at the highest levels of the “Memorandum period”. The relevant index remained virtually unchanged relative to May. Citizens’ assessments of current economic conditions again improved slightly, while in contrast, optimism about the future – with regard to both personal financial situation and the economy in general – declined marginally. The correlation between consumer sentiment and estimated voter support for the political parties in the current period is strikingly similar to the relationship observed in 2009. The increase in consumer confidence during the first half of 2014 was followed by victory for the main opposition party (SYRIZA) at the polls, just as the improvement in consumer sentiment in the six-month period 3/2009-9/2009 was followed by the impressive win of the then main opposition party (PASOK) both in the 2009 European elections and subsequently in parliamentary elections held in Autumn the same year. Consequently, the sharp rebound in consumer confidence, as recorded since the beginning of the year, did not benefit the government at the polls.

The Consumer Climate Index – CCI (71) rose marginally (+0.2 points) relative to May. The two component indices showed opposing trends. The Current Economic Conditions Index – CECI (50.1) registered a marginal increase of 2.8 points, while in contrast, the Consumer Expectations Index – CEI (85) fell by 1.5 points compared to the previous month. Overall, the Consumer Climate Index has risen significantly in the past 10 months, with total gains of almost 20 points, from 51.7 points in July  2013 to 71 points in June 2014. However, there has been no sign of a further increase in the last three months (4/2014-6/2014) and the index appears to be stabilizing at just over 70 points.

 

Propensity to buy (67.2) registered a slight increase (+2.7 points) in the space of one month. Roughly 1 in 4 consumers (27%) consider that the current period is appropriate for major purchases of household equipment (furniture, electrical appliances, etc.). Assessments of personal financial situation (32.9, +2.9 points relative to May) reached the highest level of the past four years (6/2010-6/2014), after rising for the fifth straight month. Expectations of personal financial situation (64.1) fell slightly (-0.8 points), for the first time after a period of steady increase (11/2013-6/2014). Over the past seven months this index rose from 45.9 points in October 2013 to 64.1 points in June 2014 (+18.2 points). Expectations for the economy declined marginally relative to the previous month. Short-term expectations (77.5) fell by 2.1 points and long-term expectations (113.5) by 1.6 points. Despite the drop in June, long-term expectations remain for the seventh straight month above the “psychological” 100-point barrier. It is worth noting that 22% of citizens expect the economy to recover during the coming 12 months, while 41% express optimism about the future of the economy over the next five years.

Citizens’ expectations for unemployment showed a further improvement. The relevant index (76, +2.4 points relative to May) for the third consecutive month topped the highest level recorded since 2009 elections. The percentage of those expecting unemployment to fall in the coming 12 months is almost 22% (-1% relative to May), while those anticipating an increase in the jobless rate stands at 46% (-3% compared to the previous month). Expectations for saving and inflation showed only marginal changes. Just 1 in 10 (8%, -1% relative to May) anticipate a decrease in prices in the coming 12 months, while the percentage of those considering it likely they will be able to save some amount of money in the year ahead was also down (-2% compared to May), falling to just 6%.

14.JPG