Economic Barometer – Consumer Climate Index (CCI) – November 2014


Consumer sentiment has deteriorated significantly relative to October, with the Consumer Climate Index reverting to the levels of last July. The deterioration in consumer confidence can be seen in 4 of the 5 sub-indices that make up the index. The only exception is propensity to buy, possibly on account of the 10-day sales period in the current month. Following the more general trend, expectations for unemployment declined relative to October, when they had reached the historically highest level of the past five years. However, the dip in the relevant index was not as steep as in the other indices. Overall, consumer sentiment has moved downward since the European elections.

The Consumer Climate Index – CCI (66.3) again reverted to July levels, registering the highest monthly drop (-5 points) of the past 16 months (8/2013-11/2014). The Current Economic Conditions Index – CECI (48.4, -1.3 points compared to October) appears to be stabilizing at slightly below 50 points in the past three months (9/2014-11/2014). On the other hand, the Consumer Expectations Index – CEI (78.2) plummeted (-7.5 points relative to the previous month), falling to below 80 points for the first time in seven months.

The Consumer Climate Index showed a considerable recovery between summer 2013 and the recent European elections. More specifically, from 51.7 points in July 2013 it had climbed to 72 points in April 2014, which marks the highest level of the “Memorandum period”, registering total gains of almost 20 points. Since the Euro elections, the index has shown an overall downward trend. Its current value (66.3) is roughly 6 points lower than the level recorded last April, while its average value over the six-month period since the electoral contest in May is almost 69 points, i.e. 3 points lower than the historic high of the “Memorandum period”.

Propensity to buy (70.9) is the only sub-index among the five that make up the Consumer Climate Index which registered an increase (+2 points) relative to the previous month. The sales period in the first 10 days of November is one possible explanation for the converse trend of this sub-index. It is noteworthy that propensity to buy improved for the third straight month. Assessments of personal financial situation (25.8, -4.5 points relative to October) dipped to the lowest level of the past nine months (3/2014-11/2014). Nearly 8 in 10 citizens (77%) report that their personal financial situation has worsened in the past 12 months. Expectations of personal financial situation (61.4) fell sharply (-6.4 points) relative to the previous month, when they had reached the highest levels of the past 4½ years. Nevertheless, this index remained for the ninth consecutive month above the 60-point mark. Only 1 in 10 citizens (10%) are optimistic that their personal financial situation will improve during the coming year. Expectations for the economy (67.2) registered a sharp decline (-9.8 points) in just one month, the biggest among the five sub-indices that make up the Consumer Climate Index. At the same time, expectations for the economy over the coming five years (106) shed 6.2 points relative to October. Only 17% of respondents express optimism about the short-term prospects of the economy, while 37% expect the economy to improve over the next five years.

Citizens’ expectations for unemployment (74.5) registered smaller losses (-4.1 points) than the consumer climate indices. The percentage of respondents expecting unemployment to fall in the coming 12 months (21%) was just 1% down on the October figure. Expectations for saving and inflation registered only marginal changes. Some 6% of respondents (-1% relative to the previous month) hope it is likely they will be able to save some amount of money in the year ahead, while the percentage of those anticipating a decrease in prices in the coming 12 months (8%, -1% relative to October) registered a marginal decline for the third straight month.