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Consumer Confidence
Consumer Confidence Februari 2020
January 30, 2020 10:43

Danareksa’s Consumer Confidence Index (CCI) dropped to 102.5 in January 2020 from 104.9 in the previous month. The two main components of the CCI both declined: the Present Situations Index (PSI) dropped by 4.5% mom to 85.6 and the Expectations Index (EI) slipped by 1.1% mom to 115.2. Consumer assessments toward current national and local economic conditions as well as the state of the job market all deteriorated. In our survey, the proportion of consumers claiming that current economic conditions were “good” dipped from 21.8% to 20.8%, while 49.9% of consumers said that economic conditions were “normal”. 

Looking ahead, consumers are less optimistic on the economic outlook and local business outlook over the next six months. On a positive note, however, the percentage of consumers who believe that the job market will remain stable rose to 80.3 percent. Also, the proportion of consumers expecting family incomes to increase over the next six months reached 25.1 percent (or up from 24.7 percent in the previous survey). 

Consumer confidence weakened in both urban and rural areas. The CCI for urban and rural areas slipped to 102.0 (-2.9% mom) and 103.6 (-0.9% mom), respectively. By province, the CCI fell in five of them: Jakarta (-4.3% mom to 108.5), West Java (-4.2% mom to 96.9), Central Java (-5.0% mom to 114.3), North Sumatra (-2.1% mom to 93.3) and South Sulawesi (-2.7% mom to 93.3). By contrast, the CCI only increased in East Java (+4.3% mom to 109.1). 

Consumer confidence was weaker in all income groups. The CCI for mid-income consumers (between IDR 1.5 mn – 3.0 mn/month) fell to 97.7 (-4.4% mom), for low income consumers (below IDR 1.5 mn/month) the CCI declined to 90.5 (-3.6% mom) and for high-income consumers (above IDR 3.0 mn/month) the CCI declined to 109.8 (-0.8% mom).

Consumers mentioned several factors that dampened local economic conditions. Some consumers are concerned by higher foodstuff prices (62.70 percent or up from 60.21 percent in the previous month) and job scarcity (37.12 percent or up from 36.25 percent in the previous month). In addition, more consumers (mostly in rural areas) were also worried by the problem of crop failure (5.85%). 

Most consumers foresee milder inflationary pressures over the next 6 months (the index measuring consumer sentiment toward general inflation fell by 1.8% mom to 176.5). At the same time, consumers also believe that interest rates will decline (this index dipped 2.1% mom to 119.8). However, consumers in the main cities are more positive on the rupiah’s outlook since this index strengthened 2.3% mom to 69.2. 

Inline with the lower CCI, the Buying Intentions index fell on a monthly basis (-4.7% mom to 192.8) in the January survey. Of the ten categories of goods tracked by our survey, buying attentions dropped in eight of them (cars, motorcycles, bicycles, houses, land, home renovation, home appliances and gold). On an annual basis, buying intentions grew at a slower pace in the last three months. 

The Consumer Confidence in the Government Index (CCGI) weakened 2.0% mom to 117.4 after posting a 4.3% mom increase in the previous month. All the CCGI components recorded declines. Consumers expressed less confidence in

the government’s ability to spur economic growth (-4.6% mom to 116.4), to stabilize general prices (-3.2% mom to 108.3), to provide and maintain public infrastructure (-1.1% mom to 123.6), to ensure a safe and orderly environment (-0.4% mom to 118.8) and to enforce the rule of law (-0.6% mom to 120.0).