Post on 10-Apr-2018
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14th
September2010
KenyaConsumer
Confidence
August
findings
Post-
Referendum
MelissaBaker
CEO
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Introduction
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Why measure Consumer Confidence?
Sentiment is one of the key drivers in many markets financial, consumer, durables, the stock market
and so on.
What is it?
A view of where a market is going - given where it is now.
Broadly interpreted as an indicator of the degree of confidence a person has in a market.
Changes in consumer confidence impact on the ways that consumers spend or save their money
and so predict market changes
A decline in the index may indicate not so much of a decline in consumer spendingbut a change
in its pattern.
For example, a fall might portend
a fall in durable spending (cars, appliances),
a more cautious approach to adopting credit
and a rise in savings,
whilst comfort goods (chocolate, alcohol, books, home furnishings etc) may benefit - retail
therapy.
Thus useful data for manufacturers, banks and the Government.
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Consumer Confidence Indices: USA example
University of Michigan has a monthly Consumer Confidence Index for the USA --- it is the
INTERNATIONALLY RECOGNIZED STANDARD
Many media commentators regard this as economically crucial,
and in the US, every blip and dip of the University of Michigans monthly consumer
survey is chewed over obsessively by market pundits (BBC Business website).
Many other countries have an index, but this is the first for Kenya
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Kenya index
Our index is an enhanced adaptation of the USA index, which takes into account some
of the issues facing a developing economies like ours
Thus we have added whether income is keeping up with inflation and the
impact of crime and corruption into the questions
We have also added questions about personal economic circumstances rather
than just perceptions of business conditions, since given the inequality in Kenya,
the two may not necessarily relate
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Sample
The survey was representative of Kenya adults.
The sample is a national representation of adult Kenyans aged 18 and above and is drawn inproportion to the population size per province (Census 1999)
Data weighted to reflect the population distribution of Kenya
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Questionnaire for consumer confidence
I am now going to read you a set of statements about Kenya. Some people agree with the
statements and others do not. For each statement, please could you tell me whether you agree
or disagree with it.
Jobs are easy to find at the moment
Business conditions are generally poor at the moment
You expect business conditions to improve in the next 6 months Your income is keeping up with inflation at the moment
You expect your economic circumstances to improve in the next 6 months
You expect inflation to increase over the next 6 months
You have been asked for a bribe in the past 6 months
You expect your household income to improve in the next 6 months
You have been a victim of crime in the past 6 months
Note that in one-third of the cases we included a negative statement of each of these to check
and balance the scores
Each of these statements is given a score based on its imputed importance in contributing
towards the level of confidence a consumer has in the country and economy
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Statement Weight
Jobs are easy to find at the moment 9.5
Business conditions are generally poor at the moment -2.5
You expect business conditions to improve in the next 6 months 7.2
Your income is keeping up with inflation at the moment 6.8
You expect your economic circumstances to improve in the next 6 months 8.7
You expect inflation to increase over the next 6 months -5.3
You have been asked for a bribe in the past 6 months -7.2
You expect your household income to improve in the next 6 months 8.6
Jobs are hard to find at the moment -2.6
You expect your economic circumstances to worsen in the next 6 months -15.4
You expect that jobs will be easier to find in the next 6 months 11.8
Your economic circumstances are good at the moment 4.4
You feel positive about Kenya and its future 1.8
You have been a victim of crime in the past 6 months -8.1
Constant to add 41.1
Consumer confidence index scores
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Demographics
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9
5
7
6
3
9
5
/
F
5 3
35
5 5
55+
3
p
d
D
g
phcP
f
(
)
CONSUMER
B
:T
p
=
5
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Respondent income profile
15
27
18
14
11
6
6
0
00 or less
01 000
001 00
01 10 000
10 001 1 000
1 001 0 000
0 001 0 000
0 001 100 000
Majority (60%) of the respondents have amonthly household income of Kshs 00or less.
4 % of the Kenyan population live underor very close to the poverty line of $ aday (approximately Kshs 4 amonth)*.
* Exchange rate $1 = Kshs81 for30. days per month
Average MHI = Kshs. 8,874
Base: Total Sample n= 1504
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7
1
1
1
5
7
5
H
/
1
CONSUMER
B
:T
=15
B
:
=7
3
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Consumer Confidence Index
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Overall confidence index improved since October 2009despite a dip at 3rd wave
100
120115
136
50
60
70
80
90
100
110
120
130
140
150
Wave1average Wave2average Wave3average wave4averageOct 09 Mar10 Jun 10 Aug10
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Average score on statements over time and August indexBiggest improvements in Nairobi and Coast
39 38
4346
36 33 34
43 41
52
44 45 46 46
31 39 28
49
38 36 40
5650
5450
4650
56
144
132126
109
128
152
165
0
20
40
60
80
100
120
140
160
180
airobi entral oast astern anza / alley Western
Wa e1a era e Wa e2a era e Wa e3a era e
Wa e4a era e wa e4 index
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Jobs
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9693
91 92
0
10
20
30
40
50
60
70
80
90
100
T tal
Disg ee Oct '09 Disg ee Ma '10
Disag ee u e '10 Disag ee August '10
% that disagree that jobs are easy to find at the momentM st feel j bs a e ha d t fi d cu e tly cha ge
92% feel that j bs a e NOT easy t fi d at
the m me t
The cha ges a e ma gi al a d the e d es
seem t be a st g egative feeli g
t wa ds cu e t j b availability.
Oct 09 Ma 10 u 10 Aug 10
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% that agree that jobs will be easier to find in next 6 monthsMore than one third of Kenyans have positive futureoutlook onjobs, with this % growing
15
22
27
37
0
10
20
30
40
50
60
70
80
90
100
Total
Agree ct '09 Agree ar '10 Agree June '10 Agree August '10
37% feel thatjobs will be easier to find in the next 6
months.The levels have gone up by 10% from the
last wave.
Kenyans have started to feel optimistic about thefuture of thejob market
ct 09 Mar10 Jun 10 Aug 10
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Business conditions and
economic circumstances
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% agree that business conditions are generally poor at themomentMajority feel business conditions poor. No change since
last wave
81
7476 75
0
10
20
30
40
50
60
70
80
90
100
otal
gree Oct '09 gree Mar '10 gree June'10 gree ugust '10
75% believe that business conditions are generally poor at the moment
No significant change has been noticed.
Oct 09 Mar10 Jun 10 ug 10
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% agree that business conditions will improve in the next 6monthsMore than half believe that conditions will improve, up
36
48
39
52
0
10
20
30
40
50
60
70
80
90
100
otal
ree Oct '09 ree Mar '10
ree June'10 ree u ust 10
52% feel that business conditions will improve in the next
6 months. More people feel optimistic(13%increase)
Oct 09 Mar10 Jun 10 u 10
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% who agree that Your economic circumstance is good at themomentKenyans negative about economic circumstances
Current economic circumstances still look
bad
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% agree that your economic circumstances are to improve inthe next 6 monthsOptimism about future economic circumstances up
33
46
42
58
0
10
20
30
40
50
60
70
80
90
100
Tota
Agree Oct '09 Agree Mar '10 Agree une'10 Agree august '10
There is an increase of 16%In optimism eve s about future economic
circumstances
Oct 09 Mar 10 un 10 Aug 10
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% agree that you expect your economic circumstance toworsen in next 6 monthsMore believe their economic circumstances will improve
38
26
35
23
0
10
20
30
40
50
60
70
80
90
100
otal
ree Oct '09 ree Mar '10 ree June'10 ree au ust '10
si nificant drop of12% amon those who expect their economic
circumstance to worsen in the next 6 months was witnessed betweenJune and u ust. ood indication that optimism levels are pickin up
Oct 09 Mar10 Jun 10 u 10
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% agree you expect your household income to increase innext 6 monthsbig change in those expecting income to increase over
time
33
47 48
62
0
10
20
30
40
50
60
70
80
90
100
otal
gree Oct '09 gree ar '10 gree J ne'10 gree a g st 10
contin o s pick p of optimism levels abo t ho se hold income
improving (14%increase).
Oct 09 ar10 J n 10 g 10
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Inflation
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% disagree that your income is keeping up with inflation atthe momentMost feel income not matching inflation, no change
81
69 71 70
0
10
20
30
40
50
60
70
80
90
100
Tot l
Di r t '09 Di r r '10 Di r '10 Di r t '10
Oct 09 Mar10 Jun10 Aug10
Nochange innegative perception inceMarch 2010
Anaverageof70% feel income i not keepingup with inflation
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% agree that you expect inflation to increase over next 6months42% still expect inflation to increase, no change
4946
42 42
0
10
20
30
40
50
60
70
80
90
100
otal
Agree ct '09 Agree Mar'10 Agree June'10 Agree august
No change in % of those who expect inflation to increase.But Less than
half still expect inflation to worsen.
27 Oct 09 Mar10 Jun 10 Aug 10
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Crime and Corruption
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% say they have been a victim of crime in past 6 months
811
810
0
10
20
30
40
50
60
70
80
90
100
a
ee c 09 ee Ma 10
ee J e 10 ee a s 10
he p p i f pe p e wh have
bee vic ims fc ime i pas 6 m hsis a 10%
29 c 09 Ma 10 J 10 10
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% say they have been asked for a bribe in the past 6monthsClaimed corruption levels drop.
3436 37
27
0
10
20
30
40
50
60
70
80
90
100
Total
Agree Oct '09 Agree Mar'10 Agree June'10 Agree august '10
significant change(10%DROP) since June 2010 on those who had
been asked fora bribe in the past 6 months.
30 Oct 09 Mar10 Jun 10 Aug10
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Future of Kenya
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% agree that you feel positive about Kenya and its futureBig increase in positive feeling about the future
4946
50
59
52
60
51
44
53
70
75
69
0
10
20
30
40
50
60
70
80
90
100
ota U an Rur a
Agree ct '09 Agree ar'10 Agree June'10 Agreeaugust 10
Kenyansaremore optimistica out Kenyasfuture now.Notea19%
increasefrom thepreviouswave.
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Summary
Jobs hard to find at the moment big majority, no change
Future jobs, gone up to one-third
Business conditions poor big majority, no change
Business conditions will go up half, big increase
Economic circumstances good low, no change
Future economic circumstances up 58%, big increase
Future economic circumstances to worsen 23%, big decrease
Income to go up 60 %, big decrease
Most feel income not matching inflation, no change
42% still expect inflation to increase, no change
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Overall confidence index improved since October 2009despite a dip at 3rd wave
100
120
115
136
50
60
70
80
90
100
110
120
130
140
150
Wave1average Wave2average Wave3average wave4averageOct 09 Mar10 Jun 10 Aug10
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Key points
Overall Kenyan Confidence increased between June and August 2010
from 115 to 136. This represents an overall upward trend since October
2009
The slight decrease in June 2010 may be due to pre-Constitution poll
concerns. The situation is better now that the country is stable again.
This increase is mainly caused by optimistic perception about future
economic circumstances and future business conditions.
The future of Kenya looks bright for many as is the perception from the
increased index.
No big change in crime but for corruption there is a decrease in the bribery
rate.