Indiantelevision.com Team

(3 March 2009 8:30 pm)

MUMBAI: There is no stopping the slide. Even the consumer confidence, an indicator of the health of the economy, is weakening as a result of slowdown worries, job losses and earnings pressure.

The latest CNBC-TV18 Boston Analytics Consumer Confidence Index stands proof of this. According to the data provided by the study, the index for February stood at 77.6, showing a fall of 3 per cent from January’s reading of 80.

"Weaker spending plans, decreasing job security, reduced comfort in borrowing, and expectations of increases in interest rates have contributed to this slide in the index," the report says.

Even for the longer period of 12 months (since March 2008), there has been a downward trend in business cycles.

The CNBC-TV18 and Boston Analytics Index, launched on Tuesday, consists of two sub-indices – the current situations index and the future expectations index.

For the month of February, there has been no rebound in consumer spending and optimism. According to the report, the current situations index dropped 5.5 per cent to 75.7 levels, while the future sentiments index dipped 2.9 per cent to 77.8 levels.

“The primary drivers this month were declining confidence in consumer spending, household income, job security, and economic conditions. Since consumer sentiment tends to be a leading indicator, actual consumer spending is likely to match these depressed confidence readings,” Boston Analytics Director of Research and Development Dr. Sam Thomas says.

The urban consumer in India continues to express significant concern about the future of the Indian economy. India’s slowdown could be deeper than expected currently by most economy watchers, Thomas adds.

Adds CNBC-TV18 managing editor Udayan Mukherjee, “It would be interesting to note how the index performs in the next few months in light of easing interest rates and government's pre-election fiscal stimuli.”

CNBC-TV18 and Boston Analytics Index is designed to measure consumer confidence in India on a monthly basis and is derived from a monthly survey targeting about 10,000 respondents across 15 cities.