The extended run of the pandemic with a surge in Covid cases in several parts of the globe seems to have shaken consumer confidence that had build up in the beginning of 2021.
According to the March 2021 wave of the monthly Refinitiv-Ipsos Primary Consumer Sentiment Index (PCSI) for India, consumer confidence has declined by 0.8 percentage points over February 2021.
The monthly PCSI, which is driven by the aggregation of the four weighted sub-indices is a mixed bag.
While The PCSI Employment Confidence ("Jobs") Sub-Index has moved up 1.2percentage points; the PCSI Current Personal Financial Conditions ("Current Conditions") Sub-Index is down by 2.5 percentage points.
Besides, the PCSI Investment Climate ("Investment") Sub-Index is down by 3.0 percentage points and the the PCSI Economic Expectations ("Expectations") Sub Index, is same as last month (unchanged).
The index clearly brings out that while opening up of the economy post lockdown has certainly helped to give a boost to economic activity and improved employment opportunities, investment still remains sluggish as demand conditions are picking up slowly while extended run of the pandemic is still making investors jittery of putting their money in projects.
Moreover, salary cuts and job losses during the lockdown period is still continuing in some sectors, preventing a build up of confidence levels. Moreover, rising prices in wake of higher inflation have reduced the pricing power of consumers.
Amit Adarkar, CEO, Ipsos in India, said, "The economy is in the recovery mode and the job market has started to look up after a long hiatus, but the rising inflation is a strain on daily expenses and savings - due to the high cost of living and high fuel prices. And the common man is feeling the pinch. With the pandemic still around and the second wave rearing its head, consumers will choose to be discreet with their expenses and tread with caution."
"Over the last 6-7 months, we have seen a steady recovery in consumer confidence, but the downturn in March is worrying."
Index of Industrial Production (IIP) contraction in January 2021, CPI-based/ retail inflation accelerating to 5.03% after falling to a 16-month low in January, stock markets falling from their recent high are pointing to the hard times not being over, yet and this reflects in reduced consumer confidence.
The findings are of an Ipsos online poll conducted February 19, 2021 - March 5, 2021. For this survey, a sample of 500 adults from Ipsos' India online panel aged 16-64 were interviewed online. The precision of the Refinitiv/ Ipsos online polls is measured using a Bayesian Credibility Interval. In his case, the poll has a credibility interval of plus or minus 5.0 percentage points for all adults.
The Refinitiv/Ipsos India Primary Consumer Sentiment Index (PCSI), is a monthly national survey of consumer attitudes on the current and future state of local economies, personal finance situations, savings, and confidence to make large investments.