MNI India Consumer Report May 2014

MNI India Consumer Report May 2014

Insight and data for better decisions

MNI India Consumer Report - May 20142

About MNI Indicators Insight and data for better decisions

MNI Indicators offers unique macro-economic data and insight to businesses and the investment community. We produce data and intelligence that is unbiased, pertinent and responsive. Our data moves markets.

Specialising in business and consumer focused macro-economic reports, we give our customers the ability to make timely and relevant decisions. We strive to provide up-to-date information on business and consumer confidence on the economy.

MNI Indicators publishes data on a monthly basis. Our indicators are based on a unique and proprietary methodology and are designed to present an advance picture of the economic landscape as perceived by businesses and consumers every month.

Our monthly reports explore attitudes, perspectives and confidence across different countries and regions. They deliver in-depth analysis, highlight changing patterns and how these can affect potential developments in business and consumer activities.

MNI Indicators is part of MNI, a leading provider of news and intelligence. MNI is a wholly owned subsidiary of Deutsche Börse Group, one of the largest worldwide exchange organisations.

Written and researched byPhilip Uglow, Chief EconomistShaily Mittal, Economist

MNI Indicators | Deutsche Börse Group Westferry House11 Westferry CircusLondon E14 4HETel: +44 (0)20 7862 7444Email: [email protected]

www.mni-indicators.com@MNIIndicators

Copyright© 2014 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.

Release TimeEmbargoed until 9:45 a.m. Mumbai timeJune 2, 2014

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MNI India Consumer Report - May 2014 3

MNI India Consumer Report - May 2014Contents

4 Editorial

6 Executive Summary

12 Economic Landscape

16 Indicators

17 MNI India Consumer Indicator

24 Personal Finances

27 Current Business Conditions

30 Durable Buying Conditions

31 Employment Outlook

33 Prices Sentiment

36 Interest Rate Expectations Indicator

37 Stock Investment Indicator

41 Real Estate Investment Indicator

44 Car Purchase Indicator

46 Consumer Sentiment - Regions

50 Consumer Sentiment - Income Group

52 What the Panel Said

55 Data Tables

63 Methodology

Spitzzeile Titel4

Indians, disillusioned with the current leadership and desperate for change, have given Narendra Modi a clear mandate. The key question is whether he can deliver on his pledges and live up to such high expectations.

MODIfied India


Few would deny the Indian government has been heavily criticised for not implementing economic reforms and for an inability to control persistently high inflation, both of which have impeded economic growth and led to a significant dampening of foreign investment. Indians, disillusioned with the current leadership and desperate for change, have given Narendra Modi a clear mandate.

The key question is whether new Prime Minister, Modi, can deliver on his pledges and live up to such high expectations. India’s stock market certainly thinks so. It’s been sky rocketing during the election period and hit a new record high of 25,375.63 on May 16, the day election results were announced.

Modi’s economic track record is undoubtedly impressive. He’s been chief minister of Gujarat, a state with 60 million people, for 12 years. During that time, he’s cut red tape, invested heavily in infrastructure and contained corruption. Business and investment have thrived in Gujarat making it an investment hub for international companies. The state now produces a quarter of Indian exports although accounts for just 5% of the nation’s population. Modi has promised to replicate his Gujarat policies across the rest of the country.

Our business survey shows that confidence is on the rise and expectations are running high that the business environment will improve further. Consumers are hopeful that the new government will improve employment conditions and ease price pressures.

Many voters perceive Modi as a magician and problem solver, while some also give him the status of a god. Even with a large majority Modi will find his god like powers restricted. As the head of the central

government, he has power to formulate and execute economic policies, but he will face limitations in some states who are more interested in regional rather than national issues. This is a problem he never had to face in Gujarat.

Still, to unleash its potential India needs to reform, and Modi seems like the best choice to challenge the current status quo. However, only time will tell whether he can make his style of politics work in a massively diverse country, often resistant to change.

Shaily MittalEconomistMNI Indicators

MNI China Consumer Report - May 20136

Consumer sentiment fell in May to the lowest level since January as consumers were less optimistic about the future.

Executive Summary


Consumer sentiment fell in May to the lowest level since January as consumers were less optimistic about the future.

The Consumer Indicator declined to 122.1 in May, after remaining broadly stable at 125.2 in April. Consumer confidence fell steadily throughout 2013 as the economy weakened, but gained momentum towards the end of the year. Even so, it is still nearly 2% below the level seen in May a year ago.

The survey was conducted before the election results were announced although polls had been clearly pointing to a win by the BJP.

The Consumer Indicator declined in seven out of the ten major Indian cities in May apart from Delhi, Pune and Surat. An improvement in consumer sentiment made Surat the most optimistic city in May while respondents from Hyderabad were the least.

Perceptions about the current state of business deteriorated in May and consumers were less optimistic about future business conditions compared with the previous month. The majority of those who expected business conditions to be better in a year’s time cited economic development as the main reason. Many respondents expected business conditions to improve in the hope that the Modi led government will push forward with business friendly policies.

The Durable Buying Conditions Indicator increased to 108.6 in May from 106.4 in April, as the majority of respondents reported that it was a good time or okay time to purchase large household goods.

Consumers’ dissatisfaction with the current level of prices increased in May, while expectations for inflation in a year’s time eased to the lowest since July 2013.

The Interest Rates Expectations Indicator declined to the lowest in 10 months after remaining broadly stable in April, as there were growing expectations among consumers that the new government will be successful in easing pressure on prices, a pre-requisite for an interest rate cut.

The Stock Investment Indicator, which gauges whether it is a good time to invest in the stock market, increased significantly to a series high of 120.6 in May from 110.9 in the previous month, as the continued rise in the stock market made many investors better off

MNI India Consumer Indicator - Components

Pers

onal

Fin

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: Cu

rrent

Pers

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Fin

ance

s:

Expe

cted

Dur

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Buy

ing

Cond

ition

s

Busi

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Con

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1

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Busi

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Con

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5

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0

100


All India - Overview

Mar-14 Apr-14 May-14Highest

Since Lowest

Since 3-Month Average

Monthly Change

Monthly % Change

MNI India Consumer Indicator 125.8 125.2 122.1 - Jan-14 124.4 -3.1 -2.4%

Current Indicator 115.5 114.1 114.6 Mar-14 - 114.7 0.5 0.5%

Expectations Indicator 132.8 132.6 127.2 - Jan-14 130.9 -5.4 -4.1%

Personal Finance: Current 119.4 121.8 120.6 - Mar-14 120.6 -1.2 -0.9%

Personal Finance: Expected 133.1 130.2 122.5 - Oct-13 128.6 -7.7 -5.9%

Business Condition: 1 Year 124.5 126.3 122.3 - Jan-14 124.4 -4.0 -3.2%

Business Condition: 5 Years 140.8 141.3 136.8 - Jan-14 139.6 -4.5 -3.2%

Durable Buying Conditions 111.6 106.4 108.6 Mar-14 - 108.9 2.2 2.0%

Current Business Conditions Indicator 102.9 106.3 104.7 - Mar-14 104.6 -1.6 -1.6%

Stock Investment Indicator 89.7 110.9 120.6 series high - 107.1 9.7 8.7%

Real Estate Investment Indicator 117.8 114.4 111.9 - Oct-13 114.7 -2.5 -2.2%

Car Purchase Indicator 75.3 71.7 75.2 Mar-14 - 74.1 3.5 4.9%

Employment Outlook Indicator 115.7 115.7 116.5 Feb-14 - 116.0 0.8 0.8%

Inflation Expectations Indicator 154.2 152.2 146.4 - Jul-13 150.9 -5.8 -3.8%

Current Prices Satisfaction Indicator 67.2 66.3 63.0 - series low 65.5 -3.3 -5.0%

Interest Rates Expectations Indicator 133.0 133.6 130.1 - Jul-13 132.2 -3.5 -2.6%


All India - Summary2013 2014

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May

MNI India Consumer Indicator 124.5 122.9 119.5 118.7 115.9 120.2 122.5 123.9 121.2 127.8 125.8 125.2 122.1

Current Indicator 120.7 113.7 114.1 113.9 109.3 113.9 117.0 119.0 113.2 118.4 115.5 114.1 114.6

Expectations Indicator 127.0 129.0 123.0 122.0 120.3 124.3 126.2 127.2 126.6 134.2 132.8 132.6 127.2

Personal Finance: Current 122.2 115.8 114.2 116.3 118.0 117.1 123.3 122.5 120.5 125.3 119.4 121.8 120.6

Personal Finance: Expected 131.0 128.3 121.9 122.1 118.4 122.4 125.3 131.0 127.8 137.4 133.1 130.2 122.5

Business Condition: 1 Year 119.4 124.2 121.2 115.3 114.1 119.3 118.2 117.4 119.3 128.2 124.5 126.3 122.3

Business Condition: 5 Years 130.5 134.6 126.0 128.5 128.4 131.3 135.2 133.1 132.7 136.9 140.8 141.3 136.8

Durable Buying Conditions 119.2 111.6 114.0 111.5 100.7 110.7 110.7 115.5 106.0 111.4 111.6 106.4 108.6

Current Business Conditions Indicator 121.0 118.4 113.1 111.4 108.9 108.2 109.1 114.5 108.9 116.0 102.9 106.3 104.7

Stock Investment Indicator 101.4 110.1 105.1 104.5 106.4 96.8 96.8 102.3 102.3 105.1 89.7 110.9 120.6

Investment Return 104.0 102.7 112.7 110.9 125.2 94.0 93.5 100.5 103.0 104.5 82.7 114.6 139.1

Stock Price Sentiment 103.5 100.4 111.9 116.5 124.8 107.5 115.8 105.8 107.4 103.7 128.6 119.3 112.8

Stock Market Expec-tations 103.8 127.8 114.6 119.2 118.8 103.8 112.6 112.1 111.1 114.3 114.9 137.4 135.5

Real Estate Invest-ment Indicator 113.1 115.7 115.1 109.8 109.7 110.4 113.2 114.4 114.2 119.1 117.8 114.4 111.9

House Price Expec-tations 133.3 136.3 135.1 140.8 144.7 148.6 147.9 143.8 143.1 152.6 148.6 145.9 139.8

House Buying Sen-timent 115.5 119.7 114.7 100.6 98.1 95.0 92.8 104.8 94.9 107.7 102.8 102.1 103.2

House Selling Sen-timent 109.4 109.0 104.4 111.9 113.6 112.5 101.2 105.4 95.5 102.9 98.2 104.9 107.3

Car Purchase Indi-cator 75.8 69.5 68.5 61.6 60.1 67.1 65.7 73.8 69.2 73.0 75.3 71.7 75.2

Car Purchase Expec-tations 106.0 98.5 105.7 94.3 90.3 98.4 97.7 103.0 99.0 103.2 108.9 102.3 101.8

Price of Gasoline Expectations 154.5 159.5 168.7 171.0 170.2 164.1 166.3 155.4 160.6 157.2 158.3 158.8 151.4

Employment Outlook Indicator 127.9 122.6 120.9 119.2 113.2 114.6 121.0 117.6 112.0 121.8 115.7 115.7 116.5

Inflation Expectations Indicator 136.5 143.9 144.4 152.9 156.1 152.4 159.2 152.6 153.6 154.8 154.2 152.2 146.4

Current Prices Satisfac-tion Indicator 99.7 96.4 93.9 92.6 83.2 90.2 70.2 86.2 75.7 75.4 67.2 66.3 63.0

Interest Rates Expecta-tions Indicator 125.6 120.4 129.6 133.8 136.1 137.5 138.8 140.4 136.3 134.6 133.0 133.6 130.1

All India - Records2012-Current

Minimum Maximum Mean Median

MNI India Consumer Indicator 115.9 133.7 123.5 122.9

Current Indicator 109.3 128.3 117.1 115.5

Expectations Indicator 120.3 137.3 127.8 127.2

Personal Finance: Current 114.2 135.4 122.0 121.1

Personal Finance: Expected 118.4 141.5 129.0 130.2

Business Condition: 1 Year 114.1 131.8 121.8 119.7

Business Condition: 5 Years 123.9 141.3 132.7 132.7

Durable Buying Conditions 100.7 121.1 112.2 111.6

Current Business Conditions Indicator 102.9 124.9 114.3 114.5

Stock Investment Indicator 89.7 120.6 103.8 103.7

Investment Return 82.7 139.1 109.8 106.5

Stock Price Sentiment 100.4 128.6 110.5 107.4

Stock Market Expectations 103.8 137.4 116.1 114.3

Real Estate Investment Indicator 109.7 119.9 114.7 114.4

House Price Expectations 133.3 152.6 142.5 142.7

House Buying Sentiment 92.8 121.5 106.8 106.1

House Selling Sentiment 95.5 113.6 106.3 105.4

Car Purchase Indicator 60.1 84.0 72.5 73.0

Car Purchase Expectations 90.3 114.8 103.4 103.2

Price of Gasoline Expectations 142.5 171.0 158.4 158.3

Employment Outlook Indicator 112.0 128.3 119.1 119.1

Inflation Expectations Indicator 126.8 159.2 147.5 152.2

Current Prices Satisfaction Indicator 63.0 115.9 85.3 86.2

Interest Rates Expectations Indicator 116.6 140.4 130.6 131.4


Indian economy grew by 4.7% in 2013-14, up from 4.5% recorded in the previous year.

This is the first time in 26 years that growth is below 5% for two successive years.

Spitzzeile Titel12

A landslide election victory for Narendra Modi’s Bharatiya Janata Party has created euphoria in India, driving the stock market to life-time highs and the rupee to its strongest level in nine months.

Economic Landscape


A landslide election victory for Narendra Modi’s Bharatiya Janata Party has created euphoria in India, driving the stock market to life-time highs and the rupee to its strongest level in nine months. The BJP has promised to repair the economy and tackle stubbornly high inflation. Latest economic data from India has shown modest improvement, with the current account deficit narrowing due to controls on gold imports. Both industrial production and manufacturing output shrank at a slower pace in March, although remained in negative territory. Consumer price inflation increased to its highest level in three months in April. There are increased fears that a below normal monsoon will put upward pressure on food prices, making it more challenging for the Reserve Bank of India to make policy more accommodative and for the government to kick start the economy that grew below 5% in 2013-14.

Economic growth remains subduedIndian economy grew by 4.7% in 2013-14, slightly above 4.5% growth witnessed a year ago. This is the first time in 26 years that growth is below 5% for two successive years.

GDP growth in India slowed to 4.6% on the year in the three months to March, down from 4.7% in the

previous quarter. It was, though, marginally above the 4.4% rate seen in the same period a year ago.

Data on an output basis showed that growth was boosted by agriculture which grew 6.3% on the year, compared with 3.7% in the previous quarter and 1.6% in the same quarter a year earlier. Manufacturing data was disappointing and remained in contraction, declining by 1.4% compared with a contraction of 1.5% in the previous quarter, substantially below the growth of 3% in the same quarter a year earlier. The service sector (including financing, insurance and real estate), grew by 12.4%, down from 14.1% in the previous quarter but up from 11.2% growth seen in January-March quarter a year ago.

March Industrial output shrinks at slower pace

Economic Growth

0%

2%

4%

6%

8%

10%

12%

Q1

2009

Q4

2009

Q3

2010

Q2

2011

Q1

2012

Q4

2012

Q3

2013

GDP y/y %, fiscal year

Source: Central Statistical Organisation, India

Industrial production remained in negative territory in March due to declining manufacturing output, especially capital goods. Industrial production shrunk by 0.5% in March following a 1.8% decline in February.

Much of the decline was led by weakness in manufacturing output which contracted by 1.2% on the year following a 3.7% fall in February. Twelve out of the 22 industry groups within the manufacturing sector contracted in March, led by a 33.1% fall in

Industrial Production

-10%

-5%

0%

5%

10%

15%

20%

25%

50

100

150

200

250

2007

2008

2009

2010

2011

2012

2013

2014

Industrial Production y/y % (RHS)

Industrial Production

Source: Central Statistical Organisation, India


‘Radio, TV and communication equipment & apparatus’, followed by 26.1% drop in ‘Office, accounting and computing machinery’ and 21.5% in ‘Medical, precision & optical instruments, watches and clocks’.

After increasing 2% on the year in February, mining output contracted by 0.4% in March. Output of consumer durables, a measure of consumer demand, posted the sixteenth consecutive decline, falling 11.8% in March compared with a 9.3% decline in the previous month. Capital goods output, a proxy for investment, fell sharply by 12.5% on the year, compared with a decline of 17.5% in February.

Inflation ticks up Consumer price inflation rose at the fastest pace in three months to 8.6% in April compared with 8.3% in March. The rise was driven by an increase in food prices. Food price inflation, which makes up almost half of the basket, increased to 9.8% from 9.2% in the previous month. Core CPI eased to 7.8% from 7.9% in the previous month.

Wholesale price inflation declined to a two month low of 5.2% in April from 5.7% in March, helped by a slowdown in fuel price inflation. However, food prices continued to rise in April.

In the coming months, there are additional risks of less-than-normal monsoon rains due to possible El Niño effects, which could have a negative impact on India’s agricultural output.

Repo rate unchanged at 8% The RBI left the key policy rate unchanged at 8% at its first bi-monthly monetary policy of the financial year on April 1.

Governor Raghuram Rajan said that the Reserve Bank’s policy stance will be firmly focused on keeping the economy on a disinflationary glide path that is intended to hit 8% inflation by January 2015 and 6% by January 2016. A central bank panel recently proposed to revamp its policymaking structure by setting a long-term consumer price inflation target of 4%, plus or minus 2%. As inflation remains high, it recommended that the goal should be phased in gradually.

Rajan has said that if inflation falls as expected, further policy tightening in the near term is not anticipated.

The Reserve Bank of India is expected to keep rates on hold at its June policy meeting as it waits to see the impact of monsoons on food prices.

Lower fiscal budget deficit The government budget deficit stood at Rs. 5.08 trillion in 2013-14, or 4.5% of GDP, lower than 4.6 % projected in the revised estimate, mainly on account of curbs on government expenditure. Net tax receipts totalled Rs. 10.15 trillion, below the revised target of Rs. 10.29 trillion, while total expenditure was Rs. 15.63 trillion, below the target of Rs. 15.9 trillion in the interim budget.

The government has worked out a fiscal consolidation plan to bring down the fiscal deficit to 3% of GDP in 2016-17.0%

2%

4%

6%

8%

10%

12%

Apr-

12

Jun-

12

Aug-

12

Oct

-12

Dec

-12

Feb-

13

Apr-

13

Jun-

13

Aug-

13

Oct

-13

Dec

-13

Feb-

14

Apr-

14

Wholesale and Consumer Price Inflation

Wholesale Price Inflation*

Consumer Price Inflation**

Source: *Office of the Economic Advisor, India, **MOSPI


Foreign reserves increase Foreign exchange reserves rose to $313.8 billion in the week ending May 9, from $311.86 billion a week earlier as overseas investors poured money into the stock market. According to the RBI’s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves, rose by $2 billion to $286.6 billion. These are expressed in dollar terms and include the effect of appreciation or depreciation of non-US currencies such as the euro, pound and yen, held in its reserves.

Moves by the RBI over recent months have greatly strengthened India’s foreign exchange reserve position, leaving the country less vulnerable to another run on the currency. The value of India’s gold reserves remained unchanged at $21 billion.

Trade deficit shrinks in April India’s trade deficit narrowed to $10.1 billion in April compared with $17.7 billion a year ago and a five month high of $10.5 billion in March.

Exports increased by 5.3% to $25.6 billion in April, halting two consecutive months in decline. Imports fell 15% on the year to $35.7 billion in April and were almost 11% below the $40 billion recorded in March. Oil imports fell from $15.8 billion in March to $13 billion in April. Gold imports fell significantly by 74.1% from $2.7 billion in March to $1.8 billion in April. The Bharatiya Janata Party, which won the majority in general elections, has promised to ease restrictions on gold imports, saying these curbs had led to smuggling. Narendra Modi has said that any action on gold should take into account the interests of the public and traders, not just economics and policy.

India’s current account deficit for the January-March period narrowed sharply to $1.2 billion (0.2% of GDP) from $18.1 billion (3.6% of GDP) in the same period last year, which was also lower than $4.2 billion (0.9% of GDP) in the October-December quarter of 2013-14. The lower current account deficit was primarily on account of a decline in the trade

deficit as decline in imports was sharper than that in exports owing to stringent gold curbs. In 2013-14, current account deficit printed at 1.7% of GDP, much lower than 4.7% of GDP in the previous year.

Car sales shrink in April Many car makers have launched compact cars to attract price sensitive customers and reduced prices of existing models. In spite of this, car sales decelerated by 10.2% in April, the second consecutive monthly decline and the steepest since a 12.3 % fall in May 2013. Many consumers in India have chosen to defer purchases of vehicles given the slowdown in the economy, higher loan rates and rising fuel prices. Potential buyers hope that the next government will be successful in taming inflation and introduce friendlier loan policies.

According to the Society of Indian Automobile Manufacturers’ deputy director general, cuts in excise taxes and vehicle prices have resulted in an increase in customer visits to car showrooms but have not translated into higher purchases. Companies are looking forward to the new government’s budget to see if the excise tax cut from 12% to 8% that was announced in the interim budget in February will be continued. The automobile industry is optimistic that sales will increase in 2014 as the economy rebounds and interest rates and inflation stabilise.

MNI China Consumer Report - May 201316

Consumer sentiment fell in May to the lowest level since January. However, as the new government assumes power, it has promised to kick-start the stalling economy and improve general business conditions.

Indicators


Consumer sentiment fell in May to the lowest level since January as consumers were more pessimistic about the future.

The Consumer Indicator declined to 122.1 in May after remaining broadly stable at 125.2 in April. Consumer confidence fell steadily throughout 2013 as the economy weakened, but gained momentum towards the end of the year. Even so, it is still nearly 2% below the level seen in May a year ago.

The survey was conducted before the election results were announced although polls had been clearly pointing to a win by the BJP. The new Modi government has promised to kick-start the stalling economy and improve general business conditions.

The Current Indicator, which measures consumers’ assessment of current conditions, stood at 114.6 compared with 114.1 in April. The Expectations Indicator declined to 127.2, after remaining broadly stable at 132.6 in April.

In May, four out of the five components which make up the MNI India Consumer Indicator declined. The only component to rise was the Durable Buying Conditions Indicator as the majority of consumers were optimistic about purchasing large household items. Consumers’ confidence regarding Current Personal Finances remained broadly stable while a growing number of respondents expected their Future Personal Finances to remain the same in a year’s time.

122.1MNI India Consumer Indicator Lowest Since January

MNI India Consumer Indicator

May-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14

MNI India Consumer Indicator 124.5 123.9 121.2 127.8 125.8 125.2 122.1

Current 120.7 119.0 113.2 118.4 115.5 114.1 114.6

Expectations 127.0 127.2 126.6 134.2 132.8 132.6 127.2

100

110

120

130

140

Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14

MNI India Consumer Indicator

100

105

110

115

120

125

130

135

140


Consumer Indicators

Current

Expectations


122.1

114.6

127.2

Total Indicator Current Indicator Expectations Indicator

All India

124.5119.5

127.9


South India

120.8

112.6

126.2


North India

107.6 107.7 107.5


East India

126.9

114.8

134.9


West India

124.3

117.9

128.6


Central India


In spite of the latest fall, the majority of respondents expected future business conditions to improve.

The less timely quarterly consumer survey from the Reserve Bank of India showed that consumers’ expectations improved significantly in March compared with December, in line with our own survey. Respondents reported lower confidence on spending and a small proportion of respondents felt it was a good time for making outlays for big ticket purchases such as motor vehicles and houses, consistent with our monthly survey.

RegionsThe slight decline in the MNI India Consumer Indicator was led by South and East India, the latter hitting a record low. Expectations of respondents from East India about future Personal Finances and Business Conditions in a year’s time fell to a series low.

Respondents from West India were the most optimistic, led by a significant increase in Durable Buying Conditions Indicator.

Consumers remained more optimistic about future rather than current conditions. It was only in East India, where consumers were almost equally optimistic about current conditions and future expectations.

AgeConsumer sentiment deteriorated in all age groups, and was the lowest in the oldest age group.

The Consumer Indicator for the 18-34 age range declined to 126.6 in May from 128.1 in April. All five components of the Consumer Indicator declined apart from Durable Buying Conditions which remained broadly stable. In spite of a decline, consumers remained highly optimistic about their Personal Finances, both current and expected, while their perceptions about future Business Conditions remained at elevated levels.

-0.2

-1.2

-0.6

-0.7

0.3

Personal Finance: Current

Personal Finance: Expected

Business Condition: 1 Year

Business Condition: 5 Year

Durable Buying Conditions

Consumer Indicator: Contribution to Monthly Change (% pt.)


Consumer sentiment among 35-54 year olds declined to 120.5 in May from 123.6 in April, the lowest since September 2013. The decline in sentiment was led by the Expectations Indicator, with all three of its components down on the month. Consumers were more optimistic about Current Personal Finances and buying large household items.

For the oldest age range, 55-64 year olds, sentiment declined to the lowest since January to 118.2 in May compared with 119.7 in the previous month. The decline was led by the Expectations Indicator which fell to the lowest since December 2013. Expected Personal Finances and Business Conditions in One Year, both fell to the lowest since October, while consumers were more optimistic about Business Conditions in Five Years. After a significant fall in April, consumers’ confidence to buy large household goods increased in May despite lower Current Personal Finances compared with the previous month.

IncomeConfidence deteriorated in high income households and remained broadly stable among low income households.

The Consumer Indicator for households with an average annual income of over INR 432,000 declined 2.1% on the month to 130.6 from a series high of 133.4 in April. For households with an average annual income under INR 432,000, the indicator remained broadly stable at 123.2 compared with 124.3 in April.

Compared with the previous year, confidence has increased 2.6% among higher income households, while for lower income households it has declined by 1%. On average, though, the level of confidence remains greater for high income households.

122.1

126.6

120.5

118.2

Total Indicator 18-34 35-54 55-64

Consumer Indicator: Age Groups


123.2

118.1

126.6


< INR 432,000 per annum

130.6

120.8

137.2


> INR 432,000 per annum

MNI India Consumer IndicatorIncome Groups


MNI India Consumer IndicatorMain Cities

The Consumer Indicator declined in seven out of the ten major Indian cities in May, apart from Delhi, Pune and Surat. An improvement in consumer sentiment made Surat the most optimistic city in May, while re-spondents from Hyderabad were the least.

In the capital Delhi, consumer sentiment increased for the first time in four months to 120.8 in May from 116.3 in the previous month. All five components that make up the Consumer Indicator rose, with consu-mers being the most optimistic about purchasing a large household good. Respondents’ expectations about Business Conditions in One Year hit a series high and were also optimistic about Business Condi-tions in Five Years, which rose for the first time in four months. Personal Finances, both current and ex-pected, also contributed to a brighter consumer confi-dence.

In Mumbai, India‘s most populous city, consumer sentiment declined slightly to 128.0 from 129.6 in April. Consumers were less optimistic about Business Conditions in a year’s time, although there was a rise in confidence regarding longer term expectations about business conditions. There was a small rise in consumers’ Personal Finances, both current and ex-pected, although fewer thought it was a good time to purchase large household items with the Durable Bu-ying Conditions Indicator dropped to the 100 mark, the lowest since September 2013.

Consumer confidence in Bengaluru, the third largest city by population in India, declined following sharp movements over the past five months. The Consumer Indicator fell to 131.8 from 138.0 in April, led by a significant decline in the Expectations Indicator. Sen-timent towards the purchase of household goods im-proved, while the rest of the components that make up the Consumer Indicator declined.

100

105

110

115

120

125

130

135

140


Consumer Indicator - Mumbai

110.0

140.0

120.0

140.0130.0

150.0

100.0

CurrentIndicator

ExpectationsIndicator

PersonalFinances:Current

PersonalFinances:Expected

BusinessConditions: 1

Year


Year

DurableBuying

Conditions

Consumer Indicator Components - Mumbai

In May, consumer sentiment rose the most in Surat, driven by the expectations during the survey period that Narendra Modi would win the elections. The Con-sumer Indicator increased from 131.0 in April from 138.0 in May and was 14.5% above the same period a year earlier.


100

105

110

115

120

125

130

Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14

Consumer Indicator - Delhi

80

90

100

110

120

130

140

150

160


Consumer Indicator - Bangaluru

108.2

129.2

109.6

129.8 134.6123.1

106.7

CurrentIndicator





Year


Year

DurableBuying

Conditions

Consumer Indicator Components - Delhi

125.5136.0 140.0

121.0131.0

156.0

111.0

CurrentIndicator





Year


Year

DurableBuying

Conditions

Consumer Indicator Components - Bangaluru


Consumers’ confidence regarding their Current Personal Finances remained broadly stable, while a growing number of respondents reported that they expected their Future Personal Finances to be the same in a year’s time. Current Personal Finances, which measures whether the financial situation of a household is better, the same or worse than a year ago, stood at 120.6 compared with 121.8 in April. Current Personal Finances hit a series low in July 2013, but have subsequently recovered.

The majority of respondents reported that their current financial situation remained the same compared with a year ago, and about 44% reported that their financial conditions were better.

Out of those who responded that their financial conditions improved, the majority cited better income as the main reason. A growing proportion gave credit to better family expenses for healthier finances.

Expected Personal Finances, which measures whether households think their finances will be better in a year’s time, declined for the third month in a row to 122.5 from 130.2 in April. The percentage of respondents reporting that they expected their financial situation to improve in a year’s time fell from 55.2% to 45.5%. The percentage of respondents reporting that they expected their financial situation to remain the same in a year’s time increased to 48.6% from 40.3% previously.

120.6Personal Finances Expected Finances Lowest Since October 2013

Personal Finances


Current 122.2 122.5 120.5 125.3 119.4 121.8 120.6

Expectations 131.0 131.0 127.8 137.4 133.1 130.2 122.5

100

110

120

130

140

150


Personal Finances

Current

Expectations

6.3%

37.2%

47.9%

8.4%

0.1%

Current Financial Situation Compared with 1 Year Ago (% of Households)

Much Better

A Little Better

Same

A Little Worse

Don‘t know/ No Answer

Much Worse


0.4%

2.0%

15.8%

81.8%

Monthly Household Income Used for Daily Expenses (% of Households)

38.4%

40.7%

14.6%

6.3%

Monthly Household Income Used for Savings (% of Households)

90.3%

7.2%2.3%

0.2%

Monthly Household Income Used for Large Loan Repayment (% of Households)

94.2%

5.4%

0.4%

Monthly Household Income Used for Investments(% of Households)

How Households Spend their Money

0% - 29% of Income

30% - 49% of Income

0% of Income

1% - 29% of Income

0% of Income

1% - 29% of Income

0% of Income

1% - 29% of Income

50% - 69% of Income

70% - 100% of Income

30% - 49% of Income


30% - 49% of Income


30% -49% of Income


w

Economic development of the country should improve business conditions.

There was hope among respondents that the Modi led government will push forward with business friendly policies.


Perceptions about the current state of business deteriorated in May and consumers were less optimistic about future business conditions compared with the previous month.

The Current Business Conditions Indicator, which measures respondents’ views on the state of business compared with a year earlier, declined slightly to 104.7 in May from 106.3 in the previous month. Current business sentiment has declined considerably since the survey started in November 2012, and was 13.5% below the same period a year ago.

The proportion of respondents who were positive about business conditions fell from almost 30% to 26%, while the proportion of those who found them “just fair” increased to 54.2% from 48.6% previously. Respondents who said business conditions were “poor” or “very poor” remained in minority at 15.5%.

Expectations for Business Conditions in a Year stood at 122.3 in May compared with 126.3 in April. Inspite of the fall, the majority of respondents expected business conditions to be better in a year’s time.

The majority of those who expected business conditions to be better in a year cited economic development as the main reason. Many respondents expected business conditions to improve in the hope that the Modi led government will push forward with business friendly policies.

104.7Business ConditionsFuture Expectations Lowest Since January

Business Conditions


Current 121.0 114.5 108.9 116.0 102.9 106.3 104.7

In 1 Year 119.4 117.4 119.3 128.2 124.5 126.3 122.3

In 5 Years 130.5 133.1 132.7 136.9 140.8 141.3 136.8

40

50

60

70

80

90

100

110

120

130

140


Current Business Conditions Indicator

90

100

110

120

130

140

150


Expected Business Conditions: 1 Year and 5 Years

1 Year

5 Years


Business Conditions in 1 YearSelected Reasons

Government/Policy

Econ. Development

Income/Employment

Resource/Environment

Social Stability/ Security

Events

Government/Policy

Econ. Development

Income/Employment



Events

27.3%

46.2%

15.1%

7.3%

3.0%1.0%

All India, Reasons for Better

39.4%

31.3%

13.2%

7.4% 8.8%

All India, Reasons for Worse

68.8% 67.7%

31.2% 32.3%

Apr-14 May-14

All IndiaLonger term, Expectations for Business Conditions in Five Years have been on an upward trend since July last year and the decline in May marked the first fall in four months. The indicator declined from April’s series high of 141.3 to 136.8 in May. Among the major cities surveyed, Surat, which is a large trading centre in Gujarat, was the most optimistic city.Mumbai, the financial capital of India, witnessed the largest jump in long term expectations as compared with the previous month.

Better

Worse


Business Conditions in 1 YearRegions

122.3 126.6 118.9

94.2

131.7 126.8

All India North India

SouthIndia

EastIndia

WestIndia

Central India

Business Expectations

North India South India East India West India Central India

Reasons for Better (% of Respondents)

58.3%68.4% 69.6% 72.7% 69.2%

41.7%31.6% 30.4% 27.3% 30.8%


Business Expectations: Better or Worse?(% of Respondents)


Reasons for Worse (% of Respondents)

Better

Worse

Government/Policy

Econ. Development

Income/Employment



Events

Government/Policy

Econ. Development

Income/Employment



Events


The Durable Buying Conditions Indicator increased to 108.6 in May from 106.4 in April, as the majority of respondents reported that it was a good time or okay time to purchase large household goods.

Sentiment on buying conditions fell throughout most of last year, highlighting pressure on consumers’ disposable income, owing to the weakening of the economy and high inflation. The ground lost in 2013 has still not been regained, with the result in May down almost 9% from the same period a year earlier.

Out of the ten largest cities surveyed, respondents from Kolkata were the most optimistic about buying a large household item in May. Compared with the previous month, fewer consumers from Mumbai, Ahmadabad and Chennai thought it was a good time to buy a large household item.

The rise in the Durable Buying Conditions Indicator was led by North and West India. Respondents from South India were the most optimistic about buying durable goods, although fewer respondents as compared with the previous month.

Durable Buying Conditions Highest Since March



Durable Buying Conditions 119.2 115.5 106.0 111.4 111.6 106.4 108.6

108.6

95

100

105

110

115

120

125



0.8%

35.7%

36.7%

18.0%

1.1%

7.7%

Is It a Good or Bad Time to Buy Large Household Goods? (% of Households)

Excellent Time

Good Time

Neutral

Bad Time

Very Bad Time

Don‘t Know/No Answer


The Employment Outlook Indicator increased slightly to 116.5 in May from 115.7 in April.

The indicator measures opinion on the outlook for the employment market over the next 12 months. The Modi government has promised better employment generation especially for the youth.

The May reading was below the series average of 119.1 and almost 9% below the same period a year ago.

Respondents from North and West India expected an improvement in the employment situation over the next 12 months while those from other regions were less optimistic about the employment outlook. In East India, the indicator fell below the 100 expansion/contraction level as the number of optimistic respondents reduced significantly.

The proportion of respondents who expected an improvement in the Employment Outlook increased to 42.1% in May while 48.4% expected them to remain the same. Those expecting the employment outlook to worsen declined from 12% to 9.5% in May.

Employment Outlook IndicatorHighest Since February

Employment Outlook


Employment Outlook 127.9 117.6 112.0 121.8 115.7 115.7 116.5

100

105

110

115

120

125

130


Employment Outlook Indicator

1.3%

40.8%

48.4%

8.7%

0.8%

Employment Outlook for the Next 12 Months (% of Households)

116.5

Much Better

A Little Better

Same

A Little Worse

Much Worse


w

Expectations for inflation in a year’s time eased to the lowest since July 2013.

A higher proportion of respondents thought prices would remain the same, but of those who thought prices would go up, a growing proportion thought that they would rise up to 10%.


Consumers’ dissatisfaction with the current level of prices increased in May, while expectations for inflation in a year’s time eased to the lowest since July 2013.

The Current Prices Satisfaction Indicator declined to a new series low of 63.0 in May compared with 66.3 in the previous month. A figure below 100 indicates wider dissatisfaction with the current level of prices. The further below 100, the greater the dissatisfaction. The indicator has trended down since the start of the survey in November 2012 and has been above 100 in only the first two months of the survey.

India’s consumer price inflation rose at the fastest pace in three months to 8.6% in April compared with 8.3% in March. Food price inflation, which makes up almost half of the basket, increased to 9.8% from 9.2% in the previous month. Wholesale price inflation declined to a two month low of 5.2% in April from 5.7% in March, helped by a slowdown in fuel price inflation.

The Inflation Expectations Indicator, which measures whether respondents think prices will be higher or lower in 12 months’ time, declined for the third consecutive month to 146.4 from 152.2 in April. Consumers’ expectations for inflation have remained elevated since November 2012 when the series started. Some respondents expected the new government to help bring down price pressures.

The percentage of respondents who believed prices would be higher in a year’s time fell from 82.5% to

Prices SentimentInflation Expectations Lowest Since July 2013

Prices Sentiment


Satisfaction with Current Prices 99.7 86.2 75.7 75.4 67.2 66.3 63.0

Inflation Expec-tations 136.5 152.6 153.6 154.8 154.2 152.2 146.4

60

70

80

90

100

110

120


Satisfaction with Current Prices Indicator

110

120

130

140

150

160

170


Inflation Expectations Indicator

63.0


0.8%

13.8%

16.4%

48.5%

20.5%

Satisfaction with Current Prices (% of Households)

Very Satisfied

Quite Satisfied

So So

Not Very Satisfied

Not Satisfied At All


22.2%

53.1%

19.8%

4.7%

0.2%

Inflation Expectations in 12 Months (% of Households)

Much Higher

A Little Higher

Same

A Little Lower

Much Lower


75.3%, while those saying prices would be about the same increased to 19.8% from 12.4% in the previous month. A tiny proportion of respondents believed prices would be lower in a year’s time.

A higher proportion of respondents thought prices would remain the same, but of those who thought prices would go up, a growing proportion thought that prices would rise by up to 10%.

Regions Satisfaction with Current Prices worsened significantly in East and West India, the latter hitting a series low. North Indian respondents were the least satisfied with almost three quarters of them saying they were dissatisfied.

Apart from Central and North India, more respondents from the other three regions expected prices to fall in a year’s time as compared with the previous month. Consumers from the Central region had the highest inflationary expectations since the start of the series in April 2013 and also as compared with the other regions.

Prices SentimentRegions


63.0

54.4

71.3

62.4 63.166.1


SouthIndia

EastIndia

WestIndia

Central India

Current Prices Satisfaction Indicator

146.4156.1

143.4

122.4

148.4159.8


SouthIndia

EastIndia

WestIndia

Central India

Inflation Expectations Indicator


SouthIndia

EastIndia

WestIndia

Central India

Satisfaction with Current Prices(% of Households)

Very Satisfied

Quite Satisfied

Neutral

Not Very Satisfied

Not Satisfied At All


North India

SouthIndia

EastIndia

WestIndia

Central India

Inflation Expectations in 12 Months(% of Households)

Much Higher

A Little Higher

Same

A Little Lower

Much Lower



The Interest Rates Expectations Indicator declined to the lowest in 10 months after remaining broadly stable in April, as there were growing expectations among consumers that the new government will be successful in easing pressure on prices, a pre-requisite for an interest rate cut.

The indicator declined to 130.1 in May from 133.6 in April, although was 3.6% above the outturn recorded in the same period a year ago. Since September 2013, when Raghuram Rajan took over as the Governor of the RBI, interest rates have been hiked three times in order to stabilise the sharp fall of the rupee and control inflation.

The RBI left the key policy rate unchanged at 8% at its first bi-monthly monetary policy of the financial year on April 1. Raghuram Rajan said that the Reserve Bank’s policy stance will be firmly focused on keeping the economy on a disinflationary glide path and is confident inflation will hit 8% by January 2015 and 6% by January 2016.

Interest Rate ExpectationsLowest Since July 2013

Interest Rate Expectations


Interest Rate Expectations 125.6 140.4 136.3 134.6 133.0 133.6 130.1

130.1

100

110

120

130

140

150


Interest Rate Expectations Indicator

11.6%

41.9%23.8%

4.0%

0.4%

18.3%

Expected Change in Interest Rate in 1 Year (% of Households)

Much Higher

A Little Higher

Same

A Little Lower

Much Lower

Don‘t know/ No Answer


The Stock Investment Indicator, which gauges whether it is a good time to invest in the stock market, increased significantly to a series high of 120.6 in May from 110.9 in the previous month, as the continued rise in the stock market made many investors better off.

Indian equities have rallied in recent months boosted by a growing expectation that the new government will help to improve economic growth. The benchmark Sensex hit another all-time high of 25375.63 on May 16 as BJP got a clear mandate in the general elections.

The Indicator is made up of three components; Investment Return, Stock Price Sentiment and Stock Market Expectations. Stock Price Sentiment, which measures whether respondents view equity prices as high or low and affects investment negatively, declined for the second time in a row to 112.8 from 119.3 in April.

The Stock Investment Return component increased sharply to 139.1 in May from 114.6 in April. The proportion of respondents who made a loss in the last year reduced drastically to just 5.4% from 25.7% in April and 50.1% in March while those who made a profit increased to 66.5% from 53.7% in April.

Expectations for the stock market in three months’ time declined for the first time in four months to 135.5 in May from 137.4 in April, as the majority of respondents expected equity prices to go up.

Stock Investment IndicatorHits Series High

Investment Sentiment


Investment Sentiment Indicator 101.4 102.3 102.3 105.1 89.7 110.9 120.6

Investment Return 104.0 100.5 103.0 104.5 82.7 114.6 139.1

Stock Price Sentiment 103.5 105.8 107.4 103.7 128.6 119.3 112.8

Stock Market Expectation 103.8 112.1 111.1 114.3 114.9 137.4 135.5

70

80

90

100

110

120

130

Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14

Stock Investment Indicator

7.36

1.94

-0.57

Investment Return

Stock Price Sentiment

Stock Market Expectations

Stock Investment Indicator: Contribution to Monthly Change (% pt.)

120.6


120.6

139.1

112.8

135.5

Stock InvestmentIndicator

Investment Return

Stock PriceSentiment

Stock MarketExpectations

Stock Investment Indicator - Components

80

90

100

110

120

130

140


Stock Price Sentiment

70

80

90

100

110

120

130

140

150


Investment Return

90

95

100

105

110

115

120

125

130

135

140


Stock Market Expectations

Stock Investment IndicatorRegions and Components

The Stock Investment Indicator rose to a series high in May.

Both foreign and local investors have been investing in stocks in the hope that new government’s reforms will revive the Indian economy.

w

The Real Estate Investment Indicator declined for the third consecutive month in May.

However, consumers remained optimistic and expected a reduction in home loans.


The Real Estate Investment Indicator, which gauges whether it is a good time to invest in the housing market, declined for the third consecutive month in May having risen close to the series high in February.

The indicator fell to 111.9 in May from 114.4 in April. The three month trend has followed a sharp V-curve and May’s dip marked the first fall in seven months.

The Real Estate Investment Indicator is composed of three sub-indicators to gauge sentiment on the housing market; House Price Expectations, House Buying Sentiment and House Selling Sentiment.

House Buying Sentiment picked up slightly in May to 103.2 from 102.1 in April, following two consecutive declines. 35.8% of the respondents said it was an excellent or a good time to buy a house.

Modi has promised to implement an affordable housing policy. Consumers are optimistic and expect a reduction in home loans, the implementation of the proposed GST framework and its implied tax benefits.

Since May 2013, increasingly more consumers have expected prices to rise in the next six months. After hitting a series high in February, the House Price Expectations component has eased, and in May it stood at 139.8, down from 145.9 in April. The proportion of respondents who thought house prices would rise in the next six months declined from 71.4% in April to 63.1% in May.

Real Estate Investment Indicator Third Consecutive Decline

Real Estate Investment Sentiment


Real Estate Invest-ment Sentiment 113.1 114.4 114.2 119.1 117.8 114.4 111.9

Price Expectations 133.3 143.8 143.1 152.6 148.6 145.9 139.8

House Buying 115.5 104.8 94.9 107.7 102.8 102.1 103.2

House Selling 109.4 105.4 95.5 102.9 98.2 104.9 107.3

111.9

100

105

110

115

120

125


Real Estate Investment Indicator

-1.79

0.32

-0.70

Price Expectations

House Buying Sentiment

House Selling Sentiment

Real Estate Investment Indicator: Contribution to Monthly Change (% pt.)


110

120

130

140

150

160


Real Estate Prices: Expected Changes in Next 6 Months

114.4102.1 104.9

145.9

111.9103.2 107.3

139.8

Real EstateInvestmentIndicator

House BuyingSentiment


House Price Expectations

Real Estate Investment Indicator - Components


SouthIndia

EastIndia

WestIndia

Central India

Expected Changes in Real Estate Prices in the Next 6 months (% of Households)

Real Estate Investment IndicatorComponents and Balances

The House Selling Sentiment component, which has a negative impact on the Real Estate Investment Indicator, increased for the second time in a row to 107.3 in May from 104.9 in the previous month.

RegionsThe Real Estate Investment Indicator fell in all regions apart from South India where a rise in House Buying Sentiment led the rise. Respondents in the other regions (North, East, West and Central India) were less optimistic about real estate investment.

April 2014

May 2014

Go Up Dramatically

Go Up Slightly

Stay the Same

Gow Down Slightly

Go Down Sharply



80

90

100

110

120

130


House Buying Sentiment

90

95

100

105

110

115

120



47.4%

27.3%

13.2%

4.6%3.9%

3.7%

Reasons for Buying Houses (% of Households)

1.9%

32.1%

36.7%

17.1%

2.1%9.9%

Timing for Selling Houses (% of Households)

Excellent Time

Good Time

Neutral

Bad Time

Very Bad Time


Prices

Income/Purchasing Power

Investment Value

Policy/Interest Rate

Supply and Quality

Others


The Car Purchase Indicator rose in May as consumers’ expectations for gasoline prices declined to the lowest in 15 months, while their perceptions about the timing for buying a car remained broadly stable. The indicator rose to 75.2 in May from 71.7 in April.

Many car makers have reduced prices of existing models and launched compact cars to attract price sensitive customers. In spite of this, car sales decelerated by 10.2% in April, according to the Society of Indian Automobile Manufacturers. Consumers have chosen to defer purchases of vehicles given the slowdown in the economy, higher loan rates and rising fuel prices. Potential buyers hope that the new government will be successful in taming inflation and introduce friendlier loan policies.

The Car Purchase Expectations component, which gauges whether consumers believe it is a good or bad time to purchase a car over the next 12 months, remained broadly stable after declining to an eight month low in April. The component stood at 101.8 in May compared with 102.3 in April.

Of those who thought it would be a good time to buy a car, the majority continued to cite higher purchasing power as the main reason, although a growing proportion thought it would be a good investment value.

The Indicator on Gasoline Prices, which measures expectations for the price of gasoline in a year, declined to the lowest since February 2013, to 151.4 in May compared with 158.8 in April.

Car Purchase Indicator Lower Expectations for Gasoline Prices

50

60

70

80

90


Car Purchase Indicator

80

90

100

110

120

130

140

150

160

170

180


Car Purchase Indicator - Components

Car Purchase Expectations

Price of Gasoline

Car Purchase Sentiment


Car Purchase Sentiment 75.8 73.8 69.2 73.0 75.3 71.7 75.2

Car PurchaseExpectations 106.0 103.0 99.0 103.2 108.9 102.3 101.8

Price of Gasoline 154.5 155.4 160.6 157.2 158.3 158.8 151.4

75.2


Car Purchase IndicatorRegions

101.8107.4

100.3

72.8

110.9

98.2


SouthIndia

EastIndia

WestIndia

Central India

Car Purchase Expectations - Regions


SouthIndia

EastIndia

WestIndia

Central India

Reasons for a Bad Time to Buy a Car(% of Households)

Prices



Supply and Quality

Cost of Use/Upkeep

Others

Reasons for a Good Time to Buy a Car(% of Households)


SouthIndia

EastIndia

WestIndia

Central India

Prices



Supply and Quality

Cost of Use/Upkeep

Others

0.5%

28.0%

32.1%

22.2%

1.5%

15.8%

Is it a Good Time to Buy a Car?(% of Households)

Excellent

Good Time

Neutral

Bad Time

Very Bad Time



MNI India Consumer Indicator Regions

112.6

126.2

118.7

126.5 126.6 125.4

106.5

CurrentIndicator





Year


Years

DurableBuying

Conditions

Consumer Indicator Components: North India

90

100

110

120

130

140


Consumer Indicator: North India

119.5127.9 124.6

116.9 118.9

147.8

114.3

CurrentIndicator





Year


Years

DurableBuying

Conditions

Consumer Indicator Components: South India

110

115

120

125

130

135

140


Consumer Indicator: South India


107.7 107.5 108.7 108.1

94.2

120.2

106.7

CurrentIndicator





Year


Years

DurableBuying

Conditions

Consumer Indicator Components: East India

100

110

120

130

140


Consumer Indicator: East India

114.8

134.9122.3

130.3 131.7142.9

107.4

CurrentIndicator





Year


Years

DurableBuying

Conditions

Consumer Indicator Components: West India

90

100

110

120

130

140

150


Consumer Indicator: West India



Employment Outlook for the Next 12 Months (% of Households)

North India

South India

East India

West India

Central India

Interest Rate Expectations on House and Car Loans Indicator

Much Better

A Little Better

About the Same

A Little Worse

Much Worse


117.9128.6 130.4

115.2126.8

143.8

105.4

CurrentIndicator





Year


Years

DurableBuying

Conditions

Consumer Indicator Components: Central India

110

115

120

125

130

135

Jun-13 Sep-13 Dec-13 Mar-14

Consumer Indicator: Central India


All India North India South India East India West India Central India

Is it a Good/Bad Time to Buy Large Household Goods? (% of Households)

130.1 133.6 128.6

113.5

132.3146.4

All India NorthIndia

South India

East India

West India

CentralIndia

Interest Rates Expectations (% of Households)

75.2 73.4

82.3

64.4

77.068.8


SouthIndia

EastIndia

WestIndia

Central India

Car Purchase Indicator - Regions

Much Higher

A Little HIgher

About the Same

A Little Lower

Much Lower


Excellent Time

Good Time

Neutral

Bad Time

Very Bad Time



MNI India Consumer Indicator Income Groups

121.7 120.5 115.6

143.6

114.6




Year


Years

DurableBuying

Conditions

< INR 432,000 - Components

124.3

116.1

129.8

123.2

118.1

126.6



132.9 134.4 132.2145.0

108.6




Year


Years

DurableBuying

Conditions

> INR 432,000 - Components

133.4

120.8

141.8

130.6

120.8

137.2



April 2014

May 2014

April 2014

May 2014

Confidence deteriorated in high income households in May.

On average, though, the level of confidence remains greater for high income households as compared with low income households.

Spitzzeile Titel52

A selection of comments from the panel of consumers surveyed over the past month.

What the Panel Said

“In Surat, the property rates are high but in nearby areas they are less.”

“Business conditions will improve only if new government encourages upcoming entrepreneurs.”

“There are a lot of new shops due to competition so a customer can purchase goods at reseaonable price.”

“Taxes on electronic goods has been reduced.”

“Public in Gujarat are enthusiastic. Investments here are comparatively more compared with other states.”

“It is not a good time to buy consumer durables and people should wait until the festival season.”

“There is a variety of cars in market, so it‘ll be good time for people to buy a car.”

“Economic conditions will be better if Modi government comes in power.”

“Gasoline prices depend upon the international market, rupee dollar fluctuations & crude prices.”

“To own a car is considered as a status symbol.”

“It is better to buy consumer durables online.”

“It is best to buy households goods during Diwali time because large discounts are available.”

“Building material cost is very high so prices of houses will go up.”

“There is no resale value for electronic items.”

“Because of the poor conditions of business and employment in Muzzafarnagar, it‘ll be bad time for people to buy a house here.”

“If Narendra Modi govt comes to power, things will improve.”

“Nowadays everybody carries a mobile phone as buying capacity has increased.”

“There is a hope that if Modi government comes to power, prices will be reduced.”

“Employment conditions are poor.”


w

Economic conditions will be better if Modi government comes to power...

...a general belief among many respondents.

Spitzzeile Titel 55

A closer look at the data from the May consumer survey.

Data Tables


North India Overview


Since Lowest


Monthly Change

Monthly % Change

NorthI India Consumer Indicator 125.1 119.3 120.8 Mar-14 - 121.7 1.5 1.2%



Personal Finance: Current 115.3 114.8 118.7 Feb-14 - 116.3 3.9 3.4%

Personal Finance: Expected 142.4 130.3 126.5 - Dec-13 133.1 -3.8 -2.9%

Business Condition: 1 Year 127.4 121.8 126.6 Mar-14 - 125.3 4.8 4.0%





Real Estate Investment Indicator 116.8 111.7 110.0 - Jan-14 112.8 -1.7 -1.5%

Car Purchase Indicator 69.8 71.8 73.4 Feb-14 - 71.7 1.6 2.2%

Employment Outlook Indicator 103.9 103.9 105.6 Feb-14 - 104.5 1.7 1.6%

Inflation Expectations Indicator 158.3 148.9 156.1 Mar-14 - 154.4 7.2 4.9%


Interest Rates Expectations Indicator 133.3 130.8 133.6 Dec-13 - 132.6 2.8 2.1%


South India Overview


Since Lowest


Monthly Change

Monthly % Change

South India Consumer Indicator 123.4 129.5 124.5 - Mar-14 125.8 -5.0 -3.8%

Current Indicator 120.0 123.7 119.5 - Jan-14 121.1 -4.2 -3.4%

Expectations Indicator 125.7 133.4 127.9 - Mar-14 129.0 -5.5 -4.1%


Personal Finance: Expected 114.6 121.9 116.9 - Mar-14 117.8 -5.0 -4.1%

Business Condition: 1 Year 110.9 121.5 118.9 - Mar-14 117.1 -2.6 -2.1%

Business Condition: 5 Years 151.4 156.7 147.8 - Feb-14 152.0 -8.9 -5.7%

Durable Buying Conditions 115.5 115.5 114.3 - Jan-14 115.1 -1.2 -1.0%

Current Business Conditions Indicator 110.7 107.4 114.7 Feb-14 - 110.9 7.3 6.8%


Real Estate Investment Indicator 114.6 109.4 111.0 Mar-14 - 111.7 1.6 1.5%

Car Purchase Indicator 84.7 75.3 82.3 Mar-14 - 80.8 7.0 9.4%

Employment Outlook Indicator 125.5 126.8 125.3 - Jan-14 125.9 -1.5 -1.1%


Current Prices Satisfaction Indicator 64.0 67.5 71.3 Feb-14 - 67.6 3.8 5.7%

Interest Rates Expectations Indicator 127.3 132.1 128.6 - Mar-14 129.3 -3.5 -2.7%


East India Overview


Since Lowest


Monthly Change

Monthly % Change

East India Consumer Indicator 124.6 128.6 107.6 - series low 120.3 -21.0 -16.4%

Current Indicator 112.7 117.5 107.7 - Sep-13 112.6 -9.8 -8.3%

Expectations Indicator 132.5 136.1 107.5 - series low 125.4 -28.6 -21.0%

Personal Finance: Current 109.0 114.8 108.7 - Dec-13 110.8 -6.1 -5.3%

Personal Finance: Expected 128.2 130.1 108.1 - series low 122.1 -22.0 -16.9%

Business Condition: 1 Year 130.5 129.7 94.2 - series low 118.1 -35.5 -27.3%


Durable Buying Conditions 116.4 120.2 106.7 - Sep-13 114.4 -13.5 -11.2%

Current Business Conditions Indicator 109.3 120.7 99.4 - series low 109.8 -21.3 -17.6%

Stock Investment Indicator - - - - - - - -

Real Estate Investment Indicator 124.2 126.1 111.8 - Dec-13 120.7 -14.3 -11.4%

Car Purchase Indicator 79.9 78.0 64.4 - Nov-13 74.1 -13.6 -17.4%

Employment Outlook Indicator 111.0 106.6 95.1 - Jan-14 104.2 -11.5 -10.8%

Inflation Expectations Indicator 145.1 152.4 122.4 - series low 140.0 -30.0 -19.7%

Current Prices Satisfaction Indicator 72.3 80.7 62.4 - Dec-13 71.8 -18.3 -22.7%

Interest Rates Expectations Indicator 115.3 126.3 113.5 - Mar-13 118.4 -12.8 -10.1%


West India Overview


Since Lowest


Monthly Change

Monthly % Change

West India Consumer Indicator 127.6 125.7 126.9 Mar-14 - 126.7 1.2 1.0%


Expectations Indicator 135.9 136.2 134.9 - Feb-14 135.7 -1.3 -0.9%


Personal Finance: Expected 138.2 136.1 130.3 - Nov-13 134.9 -5.8 -4.2%


Business Condition: 5 Years 140.8 138.2 142.9 Nov-12 - 140.6 4.7 3.4%




Real Estate Investment Indicator 116.8 114.1 113.6 - Oct-13 114.8 -0.5 -0.5%

Car Purchase Indicator 71.2 66.2 77.0 May-13 - 71.5 10.8 16.3%

Employment Outlook Indicator 120.2 119.2 127.1 Nov-12 - 122.2 7.9 6.6%



Interest Rates Expectations Indicator 142.5 138.8 132.3 - Jul-13 137.9 -6.5 -4.7%


Central India Overview


Since Lowest


Monthly Change

Monthly % Change

Central India Consumer Indicator 131.9 122.7 124.3 Mar-14 - 126.3 1.6 1.3%

Current Indicator 116.5 117.4 117.9 Dec-13 - 117.3 0.5 0.4%

Expectations Indicator 142.1 126.2 128.6 Mar-14 - 132.3 2.4 1.9%

Personal Finance: Current 126.3 122.3 130.4 Apr-13 - 126.3 8.1 6.6%


Business Condition: 1 Year 128.0 112.5 126.8 Mar-14 - 122.4 14.3 12.7%

Business Condition: 5 Years 149.2 135.7 143.8 Mar-14 - 142.9 8.1 5.9%

Durable Buying Conditions 106.8 112.5 105.4 - Jan-14 108.2 -7.1 -6.3%

Current Business Conditions Indicator 97.5 108.0 112.5 Feb-14 - 106.0 4.5 4.1%

Stock Investment Indicator - 133.3 116.7 - Dec-13 83.3 -16.6 -12.5%

Real Estate Investment Indicator 125.7 121.1 114.3 - Nov-13 120.4 -6.8 -5.7%

Car Purchase Indicator 73.7 75.0 68.8 - Oct-13 72.5 -6.3 -8.3%

Employment Outlook Indicator 111.9 121.4 116.1 - Mar-14 116.5 -5.3 -4.4%

Inflation Expectations Indicator 163.6 152.7 159.8 Mar-14 - 158.7 7.1 4.7%

Current Prices Satisfaction Indicator 76.3 50.9 66.1 Mar-14 - 64.4 15.2 29.8%

Interest Rates Expectations Indicator 139.8 137.5 146.4 Apr-13 - 141.2 8.9 6.5%


All India Overview by Age


Since Lowest


Monthly Change

Monthly % Change

Age 18-34

MNI India Consumer Indicator 124.5 128.1 126.6 - Mar-14 126.4 -1.5 -1.2%

Current Indicator 114.5 118.1 117.5 - Mar-14 116.7 -0.6 -0.5%



Personal Finance: Expected 131.5 130.9 130.7 - Jan-14 131.0 -0.2 -0.2%


Business Condition: 5 Years 140.4 144.9 140.4 - Feb-14 141.9 -4.5 -3.1%

Durable Buying Conditions 108.0 109.6 110.2 Jan-14 - 109.3 0.6 0.6%

Age 35-54

MNI India Consumer Indicator 126.6 123.6 120.5 - Sep-13 123.6 -3.1 -2.5%


Expectations Indicator 133.0 131.7 124.2 - Sep-13 129.6 -7.5 -5.7%

Personal Finance: Current 119.4 118.4 121.3 Feb-14 - 119.7 2.9 2.4%


Business Condition: 1 Year 124.0 124.8 120.3 - Jan-14 123.0 -4.5 -3.6%



Age 55-64



Expectations Indicator 136.1 127.6 123.5 - Dec-13 129.1 -4.1 -3.2%


Personal Finance: Expected 131.9 127.9 116.7 - Oct-13 125.5 -11.2 -8.7%

Business Condition: 1 Year 133.1 122.1 116.9 - Oct-13 124.0 -5.2 -4.2%

Business Condition: 5 Years 143.3 132.7 136.8 Mar-14 - 137.6 4.1 3.1%



All India - Overview by Income


Since Lowest


Monthly Change

Monthly % Change



Current Indicator 114.8 116.1 118.1 Feb-14 - 116.3 2.0 1.7%



Personal Finance: Expected 125.9 125.2 120.5 - Aug-13 123.9 -4.7 -3.7%

Business Condition: 1 Year 117.9 119.0 115.6 - Dec-13 117.5 -3.4 -2.8%

Business Condition: 5 Year 143.6 145.2 143.6 - Feb-14 144.1 -1.6 -1.1%

Durable Buying Conditions 114.5 108.3 114.6 Feb-14 - 112.5 6.3 5.9%


MNI India Consumer Indicator 127.1 133.4 130.6 - Mar-14 130.4 -2.8 -2.1%

Current Indicator 120.0 120.8 120.8 Feb-14 - 120.5 0.0 0.0%



Personal Finance: Expected 134.8 137.2 134.4 - Jan-14 135.5 -2.8 -2.0%





Methodology

The MNI India Consumer Sentiment Survey is a wide ranging monthly survey of consumer confidence across India.

Data is collected via telephone interviews. At least 1,000 interviews are conducted each month across the country.

The survey adopts a similar methodology to the University of Michigan survey of U.S. consumer sentiment.

The main MNI India Consumer Indicator is derived from five questions, two on current conditions and three on future expectations:

1) Current personal financial situation compared to a year ago2) Current willingness to buy major household items3) Personal financial situation one year from now4) Overall business conditions one year from now5) Overall business conditions for the next 5 years

Indicators relating to specific questions in the report are diffusion indices with 100 representing a neutral level, meaning positive and negative answers are equal. Values above 100 indicate increasing positivity while values below show increasing negativity.

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MNI India Consumer Report May 2014

Economy & Finance

Transcript of MNI India Consumer Report May 2014