Economic Barometer – Consumer Climate Index (CCI) – September 2013


Consumer confidence showed an improvement relative to July. The rise observed in the current month may to some extent be due to seasonal variation of the respective index. In any event, the recovery seen since the beginning of the year appears to have taken hold, despite the sharp fluctuations caused by major political and economic shocks (developments in Cyprus, closure of state broadcaster ERT, withdrawal of Democratic Left from the three-party coalition government, etc.). But consumer confidence still remains at extremely low levels and citizens’ expectations for the future continue to be negative.

The Consumer Climate Index – CCI (57.7) reverted to the levels of last May (59.2) after registering a significant increase (+6 points) relative to July. The Current Economic Conditions Index – CECI (44.6) gained 7.5 points, whilst the Consumer Expectations Index – CEI (66.5) rose by 5 points.

Looking at the trend of consumer confidence since December 2007, it is clear that the relevant index shows a seasonal rise at the end of each summer and at the beginning of autumn, after the summer break, with the exception of September 2012, when it fell by 8 points. The rise of the index in the current month (+6 points) is much smaller compared to previous years (+11.6 points in 2008, +11.5 points in 2009, +14.6 points in 2010 and +14.2 points in 2011).

Its trend since the beginning of the year shows an improvement in consumer confidence relative to the second half of 2012. More specifically, the index hovered around 58 points in the first nine months of 2013, whilst it averaged about 51 points in the second half of 2012.

Propensity to buy (69.3) rose markedly (+10.5 points) relative to the previous measurement (7/2013). Nearly 3 in 10 consumers (29%) believe that the current period is appropriate for major purchases of household equipment (furniture, electrical appliances, etc.). Assessments of personal financial situation (19.9, +4.6 points relative to July) registered the second best performance of the past two years, with only the value recorded last June (24.3) being higher than the current level of the relevant index. Expectations of personal financial situation (47.2) registered the smallest increase (0.8 points) among the five component indices. Generally, since the beginning of the year this latter index has shown the least volatility compared to the other indices that make up the Consumer Climate Index. Short-term expectations (53.5) rose by 4 points relative to July. Long-term expectations (98.7) registered a significantly higher increase (+10.3 points) but remained, for the third straight month, below the psychological 100-point barrier. Citizens continue to be more optimistic about the future of the economy than their own personal financial outlook. Some 16% express optimism about the country’s economic prospects over the coming 12 months, whilst the corresponding percentage for personal financial situation is half (8%).

Expectations for unemployment, inflation and saving remain at exceptionally low levels. Those anticipating a further rise in unemployment in the next 12 months (77%, +2% relative to July) increased for the fourth consecutive month. This means that the respective index has risen in total by almost 8% in the period 6/2013-9/2013. Approximately, 1 in 2 (54%) expect prices will increase during the coming 12 months, whilst only 6% believe they might be able to save some amount of money in the year ahead.