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MNI India Consumer Report 2014-03

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MNI India Consumer Indicator Falls to 125.8 in
March from 127.8 in February

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MNI India Consumer Report 2014-03

  1. 1. MNI India Consumer Report March 2014 Insight and data for better decisions
  2. 2. MNI India Consumer Report - March 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 by Philip Uglow, Chief Economist Shaily Mittal, Economist MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE Tel: +44 (0)20 7862 7444 Email: info@mni-indicators.com support@mni-indicators.com 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 Time Embargoed until 9:45 a.m. New Delhi time April 1, 2014
  3. 3. MNI India Consumer Report - March 2014 3 MNI India Consumer Report - March 2014 Contents 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
  4. 4. Spitzzeile Titel4 In less than a week’s time, the largest election ever witnessed in the world begins in India and, among businesses and investors alike, there is huge anticipation that the new government will turn around the ailing Indian economy. A Turning Point?
  5. 5. MNI India Consumer Report - March 2014 5 In less than a week’s time, the largest election ever witnessed in the world begins in India and, among businesses and investors alike, there is huge anticipation that the new government will turn around the ailing Indian economy. India’s 16th national elections kick off on April 7, and continue in a series of stages around the country before concluding on May 12. There are about 815 million eligible voters, of which a record 120 million are aged between 18-22 years and will vote for the first time this year. The Indian Congress Party (center left) and the Bharatiya Janata Party, (BJP, center right) are the two main national parties. The BJP is headed by Narendra Modi, who has presided over rapid economic growth for more than 12 years as the chief minister of the state of Gujarat. He has been wooing voters by pointing his track record as a leader who attracts investment, which is critical for India. The Congress party, which has ruled for a decade has yet to name its prime ministerial candidate, and struggles in opinion polls due to public anger over a string of corruption scandals and the sharp slowdown of economic growth. Rahul Gandhi, frontman for the Congress party has been campaigning on a primarily socialist agenda such as providing cheap food and guaranteed employment in rural areas. While Gandhi has pledged to rout the opposition BJP with “love”, equity markets seem confident that Modi will win. The BSE Sensex has rallied sharply over the past month from 20,193 on February 13 to 22,386 on March 31, a rise of almost 11%. Having fallen to a low of 17905 in August last year, the index is up by over 25% since then. An influx of foreign investment has buoyed the market too, with global fund managers pouring $937million into Indian equities in March - roughly three times the level of inflows in the previous two months. Some of the mood swing is also due to an improvement in the external environment with better growth prospects of the US and European economies. If history is a guide to the future then we’re set to see equities rally even more during the election period. The Sensex has risen during the election period in each of the past three elections and in five out of the previous six elections. Our analysis also shows that GDP growth tends to increase in the year after an election, not least due to post election increases in government spending. Already our sister business survey suggests that companies have turned the corner, so there are some reasons to be optimistic on the economy. Consumers also appear to be optimistic that a new government will turn the economy around. Equity markets, though, already appear to be pricing in a significant BJP victory and while Modi seems to be the frontrunner now, elections can produce surprises and there are still six weeks until the polls close. Philip Uglow Shaily Mittal MNI Indicators
  6. 6. MNI China Consumer Report - July 20136 The MNI India Consumer Indicator declined slightly in March led by a decline in optimism about Personal Finances. In spite of the latest fall, consumer sentiment was over 5% above the same level a year ago. Executive Summary
  7. 7. MNI India Consumer Report - March 2014 7 The MNI India Consumer Indicator declined slightly in March driven by a fall in both current and future expectations, following a rise to a 14-month high in February. The Consumer Indicator fell 1.6% on the month to 125.8 in March from 127.8 in February. In spite of this decline, consumer sentiment was over 5% above the same period a year ago. Consumer sentiment fell sharply in the summer of 2013 as the Indian economy weakened, inflation rose sharply and the turmoil in emerging markets saw the currency come under intense pressure. Confidence has subsequently improved and stood at 125.0 in the quarter ending March, up from 122.2 in the previous quarter and from 118.0 in the quarter ending September 2013. The less timely quarterly consumer survey from the Reserve Bank of India showed that consumer’s current sentiment improved marginally in December compared with September, in line with our own survey. The decline in consumer confidence was led by South and East India while consumers in the North, West and Central regions were more optimistic compared with the previous month. Consumer sentiment only improved in the oldest age range in March, increasing by 5.7% on the month to hit a series high. In contrast, consumer sentiment declined in the two other age groups, though was still above the levels seen in the same period a year earlier. Current Personal Finances declined to the lowest level since October 2013 and consumers were also less optimistic about their future personal finances. Perceptions about the current state of business declined significantly in March while there was higher optimism regarding longer term business conditions. The Durable Buying Conditions Indicator remained broadly stable at 111.6 in March compared with 111.4 in February, following a sharp decline at the start of the year to 106.0. Consumers’ satisfaction with the current level of prices declined sharply in March, while expectations for inflation in a year’s time remained broadly stable. The Stock Investment Indicator, which gauges whether it is a good time to invest in the stock market, declined significantly to 89.7 in March from 105.1 in the previous month, as the continued rise in the stock market put respondents off investing in equities. The Real Estate Investment Indicator declined in March having risen to a record high level in the previous month. The Car Purchase Indicator increased to the highest level in 10 months in March, as car purchase expectations improved and expectations for the price of gasoline remained broadly stable. MNI India Consumer Indicator - Components PersonalFinance: Current PersonalFinances: Expected DurableBuying Conditions BusinessConditionsin1 Year BusinessConditionsin5 Years 0 100
  8. 8. MNI India Consumer Report - March 20148 All India - Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change MNI India Consumer Indicator 121.2 127.8 125.8 - Jan-14 124.9 -2.0 -1.6% Current Indicator 113.2 118.4 115.5 - Jan-14 115.7 -2.9 -2.4% Expectations Indicator 126.6 134.2 132.8 - Jan-14 131.2 -1.4 -1.0% Personal Finance: Current 120.5 125.3 119.4 - Oct-13 121.7 -5.9 -4.7% Personal Finance: Expected 127.8 137.4 133.1 - Jan-14 132.8 -4.3 -3.2% Business Condition: 1 Year 119.3 128.2 124.5 - Jan-14 124.0 -3.7 -2.9% Business Condition: 5 Year 132.7 136.9 140.8 series high - 136.8 3.9 2.8% Durable Buying Conditions 106.0 111.4 111.6 Dec-13 - 109.7 0.2 0.2% Current Business Conditions Indicator 108.9 116.0 102.9 - series low 109.3 -13.1 -11.3% Stock Investment Indicator 102.3 105.1 89.7 - series low 99.0 -15.4 -14.7% Real Estate Investment Indicator 114.2 119.1 117.8 - Jan-14 117.0 -1.3 -1.2% Car Purchase Indicator 69.2 73.0 75.3 May-13 - 72.5 2.3 3.1% Employment Outlook Indicator 112.0 121.8 115.7 - Jan-14 116.5 -6.1 -5.0% Inflation Expectations Indicator 153.6 154.8 154.2 - Jan-14 154.2 -0.6 -0.4% Current Prices Satisfaction Indicator 75.7 75.4 67.2 - series low 72.8 -8.2 -10.9% Interest Rates Expectations Indicator 136.3 134.6 133.0 - Jul-13 134.6 -1.6 -1.2%
  9. 9. MNI India Consumer Report - March 2014 9 All India - Summary 2013 2014 Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar MNI India Consumer Indicator 119.7 123.9 124.5 122.9 119.5 118.7 115.9 120.2 122.5 123.9 121.2 127.8 125.8 Current Indicator 116.8 119.5 120.7 113.7 114.1 113.9 109.3 113.9 117.0 119.0 113.2 118.4 115.5 Expectations Indicator 121.6 126.8 127.0 129.0 123.0 122.0 120.3 124.3 126.2 127.2 126.6 134.2 132.8 Personal Finance: Current 116.6 121.1 122.2 115.8 114.2 116.3 118.0 117.1 123.3 122.5 120.5 125.3 119.4 Personal Finance: Expected 124.0 131.8 131.0 128.3 121.9 122.1 118.4 122.4 125.3 131.0 127.8 137.4 133.1 Business Condition: 1 Year 114.9 117.2 119.4 124.2 121.2 115.3 114.1 119.3 118.2 117.4 119.3 128.2 124.5 Business Condition: 5 Year 126.0 131.6 130.5 134.6 126.0 128.5 128.4 131.3 135.2 133.1 132.7 136.9 140.8 Durable Buying Conditions 117.1 117.9 119.2 111.6 114.0 111.5 100.7 110.7 110.7 115.5 106.0 111.4 111.6 Current Business Conditions Indicator 116.4 120.0 121.0 118.4 113.1 111.4 108.9 108.2 109.1 114.5 108.9 116.0 102.9 Stock Investment Indicator 104.5 102.3 101.4 110.1 105.1 104.5 106.4 96.8 96.8 102.3 102.3 105.1 89.7 Investment Return 110.1 105.1 104.0 102.7 112.7 110.9 125.2 94.0 93.5 100.5 103.0 104.5 82.7 Stock Price Sentiment 104.2 103.7 103.5 100.4 111.9 116.5 124.8 107.5 115.8 105.8 107.4 103.7 128.6 Stock Market Expec- tations 107.5 105.5 103.8 127.8 114.6 119.2 118.8 103.8 112.6 112.1 111.1 114.3 114.9 Real Estate Invest- ment Indicator 119.4 119.9 113.1 115.7 115.1 109.8 109.7 110.4 113.2 114.4 114.2 119.1 117.8 House Price Expec- tations 142.4 139.1 133.3 136.3 135.1 140.8 144.7 148.6 147.9 143.8 143.1 152.6 148.6 House Buying Sen- timent 118.1 121.5 115.5 119.7 114.7 100.6 98.1 95.0 92.8 104.8 94.9 107.7 102.8 House selling Senti- ment 102.2 101.1 109.4 109.0 104.4 111.9 113.6 112.5 101.2 105.4 95.5 102.9 98.2 Car Purchase Indi- cator 76.6 76.4 75.8 69.5 68.5 61.6 60.1 67.1 65.7 73.8 69.2 73.0 75.3 Car Purchase Expec- tations 107.3 109.2 106.0 98.5 105.7 94.3 90.3 98.4 97.7 103.0 99.0 103.2 108.9 Price of Gasoline Expectations 154.0 156.4 154.5 159.5 168.7 171.0 170.2 164.1 166.3 155.4 160.6 157.2 158.3 Employment Outlook Indicator 119.1 123.4 127.9 122.6 120.9 119.2 113.2 114.6 121.0 117.6 112.0 121.8 115.7 Inflation Expectations Indicator 145.6 134.0 136.5 143.9 144.4 152.9 156.1 152.4 159.2 152.6 153.6 154.8 154.2 Current Prices Satisfac- tion Indicator 78.2 96.5 99.7 96.4 93.9 92.6 83.2 90.2 70.2 86.2 75.7 75.4 67.2 Interest Rates Expecta- tions Indicator 116.6 123.0 125.6 120.4 129.6 133.8 136.1 137.5 138.8 140.4 136.3 134.6 133.0
  10. 10. All India - Records 2012-Current Minimum Maximum Mean Median MNI India Consumer Indicator 115.9 133.7 123.5 122.9 Current Indicator 109.3 128.3 117.4 116.8 Expectations Indicator 120.3 137.3 127.6 127.0 Personal Finance: Current 114.2 135.4 122.1 121.1 Personal Finance: Expected 118.4 141.5 129.3 131.0 Business Condition: 1 Year 114.1 131.8 121.5 119.4 Business Condition: 5 Year 123.9 140.8 132.0 132.0 Durable Buying Conditions 100.7 121.1 112.7 111.6 Current Business Conditions Indicator 102.9 124.9 115.3 116.0 Stock Investment Indicator 89.7 110.1 102.1 102.6 Investment Return 82.7 136.5 107.8 105.1 Stock Price Sentiment 100.4 128.6 109.7 106.6 Stock Market Expectations 103.8 134.4 113.7 112.6 Real Estate Investment Indicator 109.7 119.9 114.9 114.8 House Price Expectations 133.3 152.6 142.5 142.7 House Buying Sentiment 92.8 121.5 107.3 106.1 House Selling Sentiment 95.5 113.6 106.3 105.4 Car Purchase Indicator 60.1 84.0 72.4 73.0 Car Purchase Expectations 90.3 114.8 103.6 105.7 Price of Gasoline Expectations 142.5 171.0 158.7 158.3 Employment Outlook Indicator 112.0 128.3 119.4 119.2 Inflation Expectations Indicator 126.8 159.2 147.3 152.4 Current Prices Satisfaction Indicator 67.2 115.9 87.8 90.2 Interest Rates Expectations Indicator 116.6 140.4 130.5 131.4 MNI India Consumer Report - March 201410
  11. 11. w Economic growth slowed to 4.7% on the year in the three months to December. This was below growth of 4.8% in the previous quarter, but up from 4.4% in the same period a year ago.
  12. 12. Spitzzeile Titel12 Latest economic data has painted a mixed picture of the India economy as industrial production posted the first increase in four months and consumer price inflation fell to a 25-month low while exports ended their seven month run of increases. Economic Landscape
  13. 13. MNI India Consumer Report - March 2014 13 Latest economic data has painted a mixed picture of the India economy. Industrial production posted the first increase in four months and consumer price inflation fell to a 25-month low as the sharp rise in vegetable prices continued to unwind. While the trade deficit narrowed in February, due to lower gold imports, exports ended their seven month run of increases. Car sales posted their first increase in five months. The Reserve Bank of India raised the policy rate by 25 basis points to 8% from 7.75% at its January meeting, citing the elevated level of consumer price inflation which will restrain growth somewhat going forward. Latest GDP data showed growth of 4.7% in the final quarter of 2013 and expectations are that growth will rise slightly in the first quarter and this is supported by our survey evidence. Disappointing economic growth Economic growth in India slowed to 4.7% on the year in the three months to December, down from 4.8% 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 services that grew 7% on the year, compared with 4.2% in the previous quarter. A bountiful harvest was expected to translate into strong agricultural growth but output here was disappointing as it slowed to 3.6% compared with 4.6% in the previous quarter. Manufacturing fell back into contraction, declining by 1.9% compared with 1% growth in the previous quarter. The Finance Minister P Chidambaram expects the economy to grow by 4.9% this year and to accelerate to 6% in the next fiscal year. The economy must expand by 5.7% in the January-March quarter to achieve the forecast which on current evidence looks highly unlikely. This would be the first time in 26 years that growth will be below 5% for two successive years. Industrial outlook shows minor recovery Economic Growth 0% 2% 4% 6% 8% 10% 12% Q12009 Q32009 Q12010 Q32010 Q12011 Q32011 Q12012 Q32012 Q12013 Q32014 GDP y/y %, fiscal year Source: Central Statistical Organisation, India The Reserve Bank’s Industrial Outlook Survey, showed that the Business Expectation Index, a gauge of manufacturing business sentiment, improved marginally in the quarter ending December to 98.8 from 97.3 in the quarter ending September. Expectations for the next quarter ending March rose to 112.7 compared with the previous quarter’s 109.9. Current assessment and expectations sentiment for production, order books, capacity utilisation, exports and imports improved slightly, showing that companies were more optimistic about the demand outlook. Industrial output rises Industrial production recorded positive growth in January, albeit a very small increase of 0.1% on the year, having contracted for the previous three months. Production for the period from April 2013 to January 2014 was flat compared with 1% in the same period a year earlier. While the wider measure of industrial production increased, manufacturing output continued to decline, albeit at a slower rate. Manufacturing was down by 0.7% on the year in January following a 1.2% decline in December. Overall, 11 out of the 22 industry groups within the manufacturing sector expanded in January, led by a 17.6% output rise in ‘Medical, precision & optical instruments, watches and clocks’, followed by
  14. 14. MNI India Consumer Report - March 201414 which fell 9.9%. Although wholesale price inflation fell below the RBI‘s comfort zone of 5%, consumer price inflation remains above 8%. Repo rate increased to 8% The RBI raised the policy rate by 25 basis points to 8% from 7.75% at its January meeting, citing the elevated level of consumer price inflation. RBI Governor Raghuram Rajan made clear that inflation needed to be brought down to a low and stable level, so that monetary policy could eventually help to revive consumption and investment in a sustainable way. The RBI, however, said that if retail inflation eases as projected, it does not foresee a need for further monetary policy tightening in the near-term. 15.2% in ‘Electrical machinery & apparatus’ and 14.4% in ‘Wearing apparel; dressing and dyeing of fur’. After increasing 0.4% on the year in December, mining output growth rose 0.7% in January. Output of consumer durables, a measure of consumer demand, posted the fourteenth consecutive decline, falling 8.3% in January compared with 16.1% decline in December. Capital goods output, a proxy for investments in the economy, fell 4.2% in January compared with a decline of 2.5% in December. Inflation slows as vegetable prices decline Consumer price inflation eased to a 25-month low of 8.1% in January from 8.8% in the previous month. Food price inflation, which makes up almost half of the basket, eased to 8.6% from 9.9% in January. The moderation was driven by cooling vegetable prices which rose by 14% compared with a year earlier, down from 21.9% in January. Core CPI eased slightly to 8% compared with 8.1% in the previous month and has averaged 8% over three months. Wholesale price inflation decelerated to a nine month low of 4.7% in February, down from 5% in January. The slowdown was largely driven by vegetable prices A central bank panel 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. It appears that the RBI has already shifted its focus to CPI which it Industrial Production -10% -5% 0% 5% 10% 15% 20% 25% 50 100 150 200 250 2007 2008 2009 2010 2011 2012 2013 Industrial Production y/y % (RHS) Industrial Production Source: Central Statistical Organisation, India 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 Wholesale and Consumer Price Inflation Wholesale Price Inflation* Consumer Price Inflation** Source: *Office of the Economic Advisor, India, **MOSPI
  15. 15. MNI India Consumer Report - March 2014 15 aims to reduce to 8% by January 2015 and 6% by January 2016. Fiscal budget deficit The government budget deficit stood at Rs.5.3 trillion in the April-January period, or 101.6% of the target for the year ending March 2014, compared with 89.4% at the same point a year ago. Net tax receipts totalled Rs. 5.76 trillion in the first ten months to March 2014, while total expenditure was Rs. 12.7 trillion. The Finance Minister P Chidambaram will likely tighten spending in what is left of the year to try and bridge the gap in the public finances. The government has proposed to bring down the fiscal deficit to 4.8% of GDP in 2013-14. The government plans to defer some subsidy payments to next year, while focusing on speeding up the sale of stakes in state-run firms and minority stakes in some private companies. The government raised over Rs. 610 billion from selling licences for mobile internet spectrum in February. The fiscal deficit for 2014-15 is projected at 4.1% of GDP and 3% of GDP in 2016-17. Foreign reserves rise Foreign exchange reserves rose to $298.6 billion in the week ending March 21, from $297.3 billion a week earlier. This is the fourth consecutive week of increase in the country‘s forex reserves as overseas investors poured in money in local bonds and stock markets. According to the RBI’s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves, rose by $1.58 billion to $271.4 billion. These are expressed in dollar terms and include the effect of appreciation or depreciation of the non-US currencies such as the euro, pound and yen, held in its reserves. Moves by the RBI over the months have greatly strengthened India’s foreign exchange reserve position, leaving it less vulnerable to another run on the currency. The value of India’s gold reserves remained steady at $20.9 billion. Trade deficit shrinks in February India’s trade deficit narrowed to $8.1 billion in February, down from a $9.9 billion deficit in January, and more than 40% below the deficit of $14.1 billion seen in the same period last year. Lower imports of gold led the improvement between January and February. While the trade gap narrowed, exports contracted for the first time in eight months as they fell to $25.7 billion, 3.7% below the level seen last year and 4% below January’s $26.8 billion. Imports fell 17.1% on the year to $33.8 billion in February and 7.8% below January’s $36.7 billion. Oil imports climbed from January’s $13.2 billion to $13.7 in Februray, although were lower than $13.8 billion seen in December and 3.1% below the level in February 2013. Gold imports fell to $1.6 billion from $1.7 billion in January. The current account deficit narrowed to $4.2 billion, or 0.9% of GDP in the October to December quarter, from $31.9 billion a year earlier. The government expects to keep the current account deficit at $45 billion in the fiscal year that ends in March. Car sales increase Passenger car sales increased for the first time in five months in February, to 160,718 units, 1.4% above the previous year. For the first 11 months of this fiscal year, though, sales declined 4.6% to 1.61 million cars. Most consumers in India have chosen to defer purchases of vehicles given the slowdown in the economy, higher loan rates and rising fuel prices. The rise in car sales in Februray was attributed to price discounting from car manufacturers, following the excise duty reduction on small cars, two wheelers and commercial vehicles to 8% from 12%, announced in the interim budget. There have been reports that various new car models have also generated a lot of interest and are expected to boost sales.
  16. 16. MNI China Consumer Report - July 201316 The MNI India Consumer Indicator declined slightly in March driven by a fall in both current and future expectations, following a rise to a 14-month high in the previous month. Indicators
  17. 17. MNI India Consumer Report - March 2014 17 The MNI India Consumer Indicator declined slightly in March driven by a fall in both current and future expectations, following a rise to a 14-month high in February. The Consumer Indicator fell 1.6% on the month to 125.8 in March from 127.8 in February. In spite of this decline, consumer sentiment was over 5% above the same period a year ago. Consumer sentiment fell sharply in the summer of 2013 as the Indian economy weakened, inflation rose sharply and the turmoil in emerging markets saw the currency come under intense pressure. Confidence has subsequently improved and stood at 125.0 in the quarter ending March, up from 122.2 in the previous quarter and from 118.0 in the quarter ending September 2013. The Current Indicator decreased by 2.4% to 115.5 in March from 118.4 in February and the Expectations Indicator decreased by 1% to 132.8 in March from 134.2 in February. In March, three out of the five components which make up the Consumer Indicator declined. Personal Finances, both current and future, fell after rising in the previous month. Business Conditions in One Year dropped for the first time in three months. Consumers were more optimistic about Business Conditions in Five Years, on the belief that the new government would be able to turn the economy around. Consumers’ optimism regarding purchasing a large household 125.8 MNI India Consumer Indicator Declines in March MNI India Consumer Indicator Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 MNI India Consumer Indicator 119.7 120.2 122.5 123.9 121.2 127.8 125.8 Current 116.8 113.9 117.0 119.0 113.2 118.4 115.5 Expectations 121.6 124.3 126.2 127.2 126.6 134.2 132.8 100 110 120 130 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 MNI India Consumer Indicator 100 105 110 115 120 125 130 135 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicators Current Expectations
  18. 18. MNI India Consumer Report - March 201418 125.8 115.5 132.8 Total Indicator Current Indicator Expectations Indicator All India 123.4 120.0 125.7 Total Indicator Current Indicator Expectations Indicator South India 125.1 112.8 133.3 Total Indicator Current Indicator Expectations Indicator North India 124.6 112.7 132.5 Total Indicator Current Indicator Expectations Indicator East India 127.6 115.2 135.9 Total Indicator Current Indicator Expectations Indicator West India 131.9 116.5 142.1 Total Indicator Current Indicator Expectations Indicator Central India
  19. 19. MNI India Consumer Report - March 2014 19 item remained broadly stable in March. The less timely quarterly consumer survey from the Reserve Bank of India showed that consumers’ current sentiment improved marginally in December compared with September, in line with our own survey. Regions The decline in the Consumer Indicator was led by South and East India while consumers in the North, West and Central regions were more optimistic compared with the previous month. In South India, sentiment declined significantly to 123.4 after hitting a series high in the previous month of 135.1. In East India, confidence fell to a record low in September 2013 and since then has trended upwards. In March, the Consumer Indicator fell to 124.6 from 129.4 in the previous month and was broadly unchanged from the level seen in March a year earlier. Consumers remained more optimistic about future rather than current conditions. The Current Indicator declined in all regions apart from West and Central India. Age Consumer sentiment only improved in the oldest age range in March, increasing by 5.7% on the month to hit a series high. In contrast, consumer sentiment declined in the two other age groups, though was still above the levels seen in the same period a year earlier. The Consumer Indicator for the 18-34 age range declined by 2.3% to 124.5 in March from 127.5 in February. All five components of the Consumer Indicator fell apart from Business Conditions in Five Years which rose to a series high on the month. The -0.9 -0.7 -0.6 0.6 0.0 Personal Finance: Current Personal Finance: Expected Business Condition: 1 Year Business Condition: 5 Year Durable Buying Conditions Consumer Indicator: Contribution to Monthly Change (% pt.)
  20. 20. MNI India Consumer Report - March 201420 other two components of the Expectations Indicator, Expected Personal Finances and Business Conditions in One Year declined by 6.9% and 3.5% respectively. Durable Buying Conditions declined for the third consecutive month and there was a dip in Current Personal Finances. After a sharp rise in consumer sentiment among 35- 54 age olds to 130.2 in February, confidence fell to 126.6 in March. The decline in sentiment was led by all five components, with Current Personal Finances falling the most. Consumers were least optimistic about buying a large household item, although it fell only slightly from the previous month. For the oldest age range, 55-64 year olds, sentiment increased for the second month in a row to 127.3 from 120.5 in February. Apart from Current Personal Finances, all the other components increased. There were significant increases in consumers’ expectations about Business Conditions in Five Years and Durable Buying Conditions. Income Consumer confidence declined in both low and high income households. The Consumer Indicator for households with an average annual income of over INR 432,000 declined 4.2% on the month to 127.1 in March from 132.6 in February. For households with an average annual income under INR 432,000, the indicator fell by 5% on the month to 123.4 from 129.8 in February. Since March 2013, confidence has increased 5.6% among lower income households, while for higher income households it has risen by less than 1%. On average, though, the level of confidence remains greater for higher income households. 125.8 124.5 126.6 127.3 Total Indicator 18-34 35-54 55-64 Consumer Indicator: Age Groups
  21. 21. MNI India Consumer Report - March 2014 21 123.4 114.8 129.2 Total Indicator Current Indicator Expectations Indicator < INR 432,000 per annum 127.1 120.0 131.9 Total Indicator Current Indicator Expectations Indicator > INR 432,000 per annum MNI India Consumer Indicator Income Groups
  22. 22. MNI India Consumer Report - March 201422 MNI India Consumer Indicator Main Cities The Consumer Indicator declined in seven out of the ten major Indian cities in March apart from Pune, Su- rat and Visakhapatnam. Successive improvements in consumer sentiment made Pune the most optimistic city in March while Hyderabad was the least. In the capital Delhi, consumer sentiment was broadly stable at 121.1 compared with 121.4 in the previous month. Of the five components, both Current and Ex- pected Personal Finances and Durable Buying Condi- tions improved while expectations about Business Conditions in One and Five Years deteriorated. In Mumbai, India‘s most populous city, consumer sentiment remained broadly stable at 124.5 in March as compared with 124.8 in the previous month. Re- spondents were more optimistic about buying large household items and Business Conditions in Five Ye- ars, while they were less optimistic about Business Condition in One Year and Personal Finances. In contrast to Delhi and Mumbai, confidence in Ban- galore, the third largest city by population in India, declined sharply following a large increase in the pre- vious month. The Consumer Indicator fell to 121.2 from 152.0 in February, led by significant losses in all five components. Consumer sentiment in Bangalore has been volatile over the past four months and the decline in March was led by almost equal falls in the Current and Ex- pectations Indicators. The Current Conditions Indica- tor declined to 114.0 from 146.0 in February, while the Expectations Indicator declined to 126.0 from 156.0. In Pune, consumer sentiment rose for the second month in a row to the highest since May 2013. The Consumer Indicator increased from 129.4 in February to 133.4 in March and was 5.4% above the same period a year earlier. 100 105 110 115 120 125 130 135 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator - Mumbai 108.8 135.0 113.8 131.9 126.9 146.3 103.8 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Year Durable Buying Conditions Consumer Indicator Components - Mumbai
  23. 23. MNI India Consumer Report - March 2014 23 100 105 110 115 120 125 130 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Consumer Indicator - Delhi 80 90 100 110 120 130 140 150 160 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator - Bangalore 111.1 127.8 112.0 136.1 121.3 125.9 110.2 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Year Durable Buying Conditions Consumer Indicator Components - Delhi 114.0 126.0 122.0 118.0 123.0 137.0 106.0 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Year Durable Buying Conditions Consumer Indicator Components - Bangalore
  24. 24. MNI India Consumer Report - March 201424 Current Personal Finances declined to the lowest level since October 2013 and consumers were also less optimistic about their future personal finances. Current Personal Finances, which measures whether the financial situation of a household is better, the same or worse than a year ago, declined by 4.7% to 119.4 in March, offsetting the previous month’s gain to 125.3. Current Personal Finances hit a low in the summer of 2013, but have subsequently bounced back and were up from 119.7 in March last year. The percentage of respondents who reported that their current financial situation improved compared with a year ago fell to 43.5% in March from 51.2% in February. Those reporting financial conditions were the same as last year increased to 45.4% from 41.4%, while those reporting a worsening increased from 7.4% to 11.2%. Out of those who responded that their financial conditions improved, a growing proportion cited better family expenses as the reason for this. Expected Personal Finances, which measures whether households think their finances will be better in a year’s time, declined to 133.1 from 137.4 in February. The percentage of respondents reporting that they expected their financial situation to improve in a year’s time fell from 65% to 60%. The percentage of respondents reporting that they expected their financial situation to worsen in a year’s time increased to 5.3% from 3.3% in February. 119.4 Personal Finances Both Current and Expected Finances Sink Personal Finances Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Current 116.6 117.1 123.3 122.5 120.5 125.3 119.4 Expectations 124.0 122.4 125.3 131.0 127.8 137.4 133.1 100 110 120 130 140 150 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Personal Finances Current Expectations 7.6% 35.9% 45.4% 9.9% 1.2% Current Financial Situation Compared with 1 Year Ago (% of Households) Much Better A Little Better Same A Little Worse Much Worse
  25. 25. MNI India Consumer Report - March 2014 25 0.9% 4.8% 17.6% 76.7% Monthly Household Income Used for Daily Expenses (% of Households) 28.7% 46.7% 18.9% 5.7% Monthly Household Income Used for Savings (% of Households) 84.5% 9.5% 3.4% 0.4% Monthly Household Income Used for Large Loan Repayment (% of Households) 90.1% 8.3% 0.9% 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 50% - 100% of Income 30% - 49% of Income 50% - 100% of Income 30% -49% of Income 50% - 100% of Income
  26. 26. w Perceptions about longer term Business Conditions hit a series high. The indicator increased to 140.8 in March from 136.9 previously.
  27. 27. MNI India Consumer Report - March 2014 27 Perceptions about the current state of business declined significantly in March while there was higher optimism regarding longer term business conditions. The Current Business Conditions Indicator, which measures respondents’ views on the state of business compared with a year earlier, decreased to a series low of 102.9, 11.3% below the level of 116.0 in February. The proportion of respondents who were positive about business conditions fell from 44.1% in February to 31.1% in March while the proportion of those who found them “just fair” increased to 39.7% from 36.8% previously. Respondents who said business conditions were “poor” or “very poor” increased significantly to 24.4% from 14.5% previously. Expectations for Business Conditions in a Year fell after rising for two consecutive months. The indicator declined to 124.5 from 128.2 in February, as the percentage of respondents who reported that business conditions would be better in a year’s time fell from almost 56% to 50.7%. The majority of respondents who expected business conditions to be better in a year cited economic development as the main reason, although fewer than in the previous month. Many panellists expected business conditions to improve after the national election, in the hope that a new government will push forward with business friendly policies. 102.9 Business Conditions Longer Term Business Expectations Hit Record High Business Conditions Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Current 116.4 108.2 109.1 114.5 108.9 116.0 102.9 In 1 Year 114.9 119.3 118.2 117.4 119.3 128.2 124.5 In 5 Years 126.0 131.3 135.2 133.1 132.7 136.9 140.8 80 90 100 110 120 130 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Current Business Conditions Indicator 90 100 110 120 130 140 150 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Expected Business Conditions: 1 Year and 5 Years 1 Year 5 Years
  28. 28. MNI India Consumer Report - March 201428 Business Conditions in 1 Year Selected Reasons Government/Policy Econ. Development Income/Employment Resource/Environment Social Stability/ Security Events Government/Policy Econ. Development Income/Employment Resource/Environment Social Stability/ Security Events 32.3% 47.3% 8.9% 7.3% 4.0% 0.2% All India, Reasons for Better 39.8% 29.8% 5.2% 8.3% 16.5% 0.5% All India, Reasons for Worse 70.2% 69.7% 29.8% 30.3% Feb-14 Mar-14 All India A growing proportion of respondents, who expected business conditions to worsen, cited social stability as the main reason. Longer term, Expectations for Business Conditions in Five Years have been on an upward trend since July last year and rose to a series high in March. The indicator increased to 140.8 from 136.9 previously. Among the major cities surveyed, Ahmedabad was the most optimistic and witnessed the highest jump from the previous month, probably owing to expectations that Narendra Modi who is the Chief Minister of the state of Gujarat would gain a majority in the national election. Surat, another major city in Gujarat, had higher expectations about long term business conditions. Better Worse
  29. 29. MNI India Consumer Report - March 2014 29 Business Conditions in 1 Year Regions 124.5 127.4 110.9 130.5 128.7 128.0 All India North India South India East India West India Central India Business Expectations North India South India East India West India Central India Reasons for Better (% of Respondents) 66.4% 67.1% 71.8% 74.3% 66.7% 33.6% 32.9% 28.2% 25.7% 33.3% North India South India East India West India Central India Business Expectations: Better or Worse? (% of Respondents) North India South India East India West India Central India Reasons for Worse (% of Respondents) Better Worse Government/Policy Econ. Development Income/Employment Resource/Environment Social Stability/ Security Events Government/Policy Econ. Development Income/Employment Resource/Environment Social Stability/ Security Events
  30. 30. MNI India Consumer Report - March 201430 The Durable Buying Conditions Indicator remained broadly stable at 111.6 in March compared with 111.4 in February, following a sharp decline at the start of the year to 106.0. The Indicator on Durable Buying Conditions measures whether respondents think it is a good time or bad time to buy a large household good. A rise in the indicator means more respondents said it was a good time to buy a large household good. Sentiment on buying conditions fell throughout most of last year, signalling pressure on consumers’ disposable income, owing to the weakening of economy and high inflation. The lost ground has not been made up, with the result in March down 4.7% below 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 March. Compared with last month, consumers from Delhi and Surat, Visakhapatnam thought it was a better time to buy a large household item. The Indicator increased in all regions apart from South and Central India. Respondents from East India were the most optimistic about buying durable goods as the Indicator rose to 116.4, the first rise in three months. For all India, the proportion of respondents who said it was an “excellent time” or “good time” to buy large household goods remained broadly stable at 42.5% as compared with 42% in the previous month. Durable Buying Conditions Remain Broadly Stable Durable Buying Conditions Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Durable Buying Conditions 117.1 110.7 110.7 115.5 106.0 111.4 111.6 111.6 95 100 105 110 115 120 125 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Durable Buying Conditions 1.0% 41.5% 34.1% 17.0% 1.7% 4.8% 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
  31. 31. MNI India Consumer Report - March 2014 31 The Employment Outlook Indicator declined to 115.7 in March after rising significantly in the previous month, pushing it below the 119.1 outturn seen in March 2013. The indicator measures opinion on the outlook for the employment market over the next 12 months and the March reading was below the average of the series of 119.4. Respondents from all regions apart from West India expected a considerable deterioration in the employment situation. In West India, respondents’ expectations remained broadly stable and were the highest since December 2013. The proportion of respondents who expected an improvement in the Employment Outlook declined to 43.8% in March from almost 52% in February, while those forecasting a worsening increased to 14.4% from 12.3%. Those suggesting there would be no change increased significantly from 35.6% to 41.7%. Employment Outlook Indicator Declines in March Employment Outlook Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Employment Outlook 119.1 114.6 121.0 117.6 112.0 121.8 115.7 100 105 110 115 120 125 130 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Employment Outlook Indicator 3.5% 40.4% 41.7% 13.0% 1.4% Employment Outlook for the Next 12 Months (% of Households) 115.7 Much Better A Little Better Same A Little Worse Much Worse Don‘t Know/No Answer
  32. 32. w Consumers’ satisfaction with the current level of prices declined sharply. The increased dissatisfaction with prices came in spite of a decline in India’s official inflation that eased to a 25-month low of 8.1% in January.
  33. 33. MNI India Consumer Report - March 2014 33 Consumers’ satisfaction with the current level of prices declined sharply in March, while expectations for inflation in a year’s time remained broadly stable. The Current Prices Satisfaction Indicator declined significantly to a series low of 67.2 in March compared with 75.4 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 was above 100 in only the first two months of the survey. The increased dissatisfaction with prices came in spite of a decline in India’s official inflation figures. Consumer price inflation eased to a 25-month low of 8.1% in January from 8.8% in the previous month. Food price inflation, which makes up almost half of the basket, eased to 8.6% from 9.9% in January. Wholesale price inflation also decelerated to a nine month low of 4.7% in February, down from 5% in January. The Inflation Expectations Indicator, which measures whether respondents think prices will be higher or lower in 12 months’ time, remained broadly stable at 154.2 in March as compared with 154.8 in February. Consumers’ expectations for inflation have remained elevated since November 2012 when the series started. Some respondents said they are looking forward to the national election in May with an expectation that the new government will help bring down price pressures. Prices Sentiment Discontent Hits a New Low Prices Sentiment Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Satisfaction with Current Prices 78.2 90.2 70.2 86.2 75.7 75.4 67.2 Inflation Expec- tations 145.6 152.4 159.2 152.6 153.6 154.8 154.2 60 70 80 90 100 110 120 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Satisfaction with Current Prices Indicator 110 120 130 140 150 160 170 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Inflation Expectations Indicator 67.2
  34. 34. MNI India Consumer Report - March 201434 1.9% 17.2% 15.8% 43.8% 21.4% Satisfaction with Current Prices (% of Households) Very Satisfied Quite Satisfied So So Not Very Satisfied Not Satisfied At All Don‘t Know/No Answer 31.6% 52.3% 9.9% 5.0% 1.1% 0.1% Inflation Expectations in 12 Months (% of Households) Much Higher A Little Higher Same A Little Lower Much Lower Don‘t Know/No Answer The percentage of respondents who believed prices would be higher in a year’s time remained flat at 83.9%, while those saying prices would be about the same fell to 9.9% from 12% in the previous month. A small but rising number of respondents believed prices would be lower in a year’s time and their proportion increased from 4.1% to 6.1%. Asked about how much they thought prices would increase, a growing proportion of respondents thought that prices would rise by 5%, which was down from expectations of a price rise between 6% and 9% in February and over 25% in January. Regions Satisfaction with Current Prices worsened significantly in North and South India, hitting a series low in the former. In North India, the proportion of respondents who were satisfied with the current level of prices fell from almost 25% to 17.8%. Respondents from Central India were the least dissatisfied with current prices in March following a sharp decline in February when the indicator hit a series low. Apart from South and East India, respondents from the other three regions expected prices to rise in a year’s time. Consumers from the Central region had the highest inflation expectations on the month. Prices Sentiment Regions
  35. 35. MNI India Consumer Report - March 2014 35 67.2 60.8 64.0 72.3 70.6 76.3 All India North India South India East India West India Central India Current Prices Satisfaction Indicator 154.2 158.3 143.6 145.1 160.6 163.6 All India North India South India East India West India Central India Inflation Expectations Indicator All India North India South India East India West India Central India Satisfaction with Current Prices (% of Households) Very Satisfied Quite Satisfied Neutral Not Very Satisfied Not Satisfied At All Don‘t Know/No Answer North India South India East India West India Central India Inflation Expectations in 12 Months (% of Households) Much Higher A Little Higher Same A Little Lower Much Lower Don‘t Know/No Answer
  36. 36. MNI India Consumer Report - March 201436 The Interest Rate Expectations Indicator declined for the third consecutive month in March, although remained at an elevated level. The indicator fell to 133.0 from 134.6 in the previous month, the lowest since July 2013, but was still above the series average of 130.5. The three months to March saw the indicator decline to 134.6 compared with 138.9 recorded in the three months to December. The Reserve Bank of India (RBI) hiked the key policy repo rate at the January monetary policy meeting by 25 basis points from 7.75% to 8%. The RBI said, however, that if retail price inflation eased as projected, it did not foresee a need for further monetary policy tightening in the near-term. The RBI is expected to keep its key interest rate steady at 8% at its next meeting on April 1 due to the slowdown on inflation. Interest Rate Expectations Third Decline in a Row Interest Rate Expectations Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Expected Interest Rate 116.6 137.5 138.8 140.4 136.3 134.6 133.0 133.0 100 110 120 130 140 150 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Interest Rate Expectations Indicator 17.6% 40.4% 16.4% 8.1% 0.7% 16.9% Expected Change in Interest Rate in 1 Year (% of Households) Much Higher A Little Higher Same A Little Lower Much Lower
  37. 37. MNI India Consumer Report - March 2014 37 The Stock Investment Indicator, which gauges whether it is a good time to invest in the stock market, declined significantly to 89.7 in March from 105.1 in February, as the continued rise in the stock market put respondents off investing in equities. Indian equities have rallied in recent weeks, helped by a growing expectation that the upcoming general election will help to improve economic growth. Opinion polls have showed that pro-business candidate, Narendra Modi, is expected to form a government. Some improvement in recent macroeconomic data including a narrower current account deficit and easing inflationary pressures have also helped. The benchmark Sensex breached the 22,000 mark on March 10 and closed at 22,386 on March 31. Analysts expect to see increased volatility in the benchmark index ahead of the general election. Stock Price Sentiment, which measures whether respondents view equity prices as high or low, rose sharply to a record high in March to 128.6 compared with 103.7 in February. The component has a negative impact on the overall investment indicator. The Stock Investment Return component declined significantly after rising for three consecutive months to 82.7 in March from 104.5 in the previous month. Expectations for the stock market in three months’ time remained broadly stable at 114.9 in March compared with 114.3 in the previous month. Stock Investment Indicator Series Low Investment Sentiment Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Investment Sentiment Indicator 104.5 96.8 96.8 102.3 102.3 105.1 89.7 Investment Return 110.1 94.0 93.5 100.5 103.0 104.5 82.7 Stock Price Sentiment 104.2 107.5 115.8 105.8 107.4 103.7 128.6 Stock Market Expectation 107.5 103.8 112.6 112.1 111.1 114.3 114.9 70 80 90 100 110 120 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Stock Investment Indicator -6.94 -7.91 0.18 Investment Return Stock Price Sentiment Stock Market Expectations Stock Investment Indicator: Contribution to Monthly Change (% pt.) 89.7
  38. 38. MNI India Consumer Report - March 201438 89.7 82.7 128.6 114.9 Stock Investment Indicator Investment Return Stock Price Sentiment Stock Market Expectations Stock Investment Indicator - Components 80 90 100 110 120 130 140 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Stock Price Sentiment 70 80 90 100 110 120 130 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Investment Return 90 95 100 105 110 115 120 125 130 135 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Stock Market Expectations Stock Investment Indicator Regions and Components
  39. 39. w The Stock Investment Indicator declined significantly in March... ...as the continued rise in the stock market put respondents off investing in equities.
  40. 40. w The Real Estate Investment Indicator declined in March, having risen close to record high levels. The Indicator fell in all regions apart from West and Central India, driven by a rise in House Price Expectations and a decline in House Selling Sentiment.
  41. 41. MNI India Consumer Report - March 2014 41 The Real Estate Investment Indicator, which gauges whether it is a good time to invest in the housing market, declined in March having risen close to a record high level in the previous month. The indicator fell to 117.8 in March from 119.1 in February, although the three month trend rose for the fifth consecutive month. Sentiment on real estate dipped in the second half of last year before picking up in 2014. Indian developers and contractors are reliant on ties with the government to acquire land or win contracts and hence many projects are stalled, at least temporarily, until the conclusion of the upcoming elections. According to another study by the Federation of Indian Chambers of Commerce and Industry and Knight Frank, India’s real estate market deteriorated in the last quarter of 2013 and current sentiment is pessimistic across the country. The Real Estate Investment Indicator is composed of three sub-indicators. House Buying Sentiment declined in March to 102.8 after rising sharply in the previous month to 107.7. There was a decline in the proportion of respondents who said it was an excellent or a good time to buy a house from 43.6% to 38.1%. There was a significant rise in the number of responses from people who said they were uncertain. Since May 2013, increasingly more consumers have expected that prices would rise in the next six months. Real Estate Investment Indicator Declines Slightly Real Estate Investment Sentiment Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Real Estate Invest- ment Sentiment 119.4 110.4 113.2 114.4 114.2 119.1 117.8 Price Expectations 142.4 148.6 147.9 143.8 143.1 152.6 148.6 House Buying 118.1 95.0 92.8 104.8 94.9 107.7 102.8 House Selling 102.2 112.5 101.2 105.4 95.5 102.9 98.2 117.8 100 105 110 115 120 125 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Real Estate Investment Indicator -1.11 -1.38 1.33 Price Expectations House Buying Sentiment House Selling Sentiment Real Estate Investment Indicator: Contribution to Monthly Change (% pt.)
  42. 42. MNI India Consumer Report - March 201442 110 120 130 140 150 160 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Real Estate Prices: Expected Changes in Next 6 Months 119.1 107.7 102.9 152.6 117.8 102.8 98.2 148.6 Real Estate Investment Indicator House Buying Sentiment House Selling Sentiment House Price Expectations Real Estate Investment Indicator - Components All India North India South India East India West India Central India Expected Changes in Real Estate Prices in the Next 6 months (% of Households) Real Estate Investment Indicator Components and Balances After rising to a series high of 152.6 in February, the House Price Expectations component slackened to 148.6. The proportion of respondents who thought house prices would rise in the next six months declined from 78.3% to 73.5%. The House Selling Sentiment component, which has a negative impact on the Real Estate Investment Indicator, fell below the 100 mark in March to 98.2 from 102.9 in February. Regions The Indicator fell in all regions apart from West and Central India driven by a rise in House Price Expectations and a decline in House Selling Sentiment. Respondents in North, South and East India were less optimistic about future house prices. February 2014 March 2014 Go Up Dramatically Go Up Slightly Stay the Same Gow Down Slightly Go Down Sharply Don‘t Know/No Answer
  43. 43. MNI India Consumer Report - March 2014 43 80 90 100 110 120 130 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 House Buying Sentiment 90 95 100 105 110 115 120 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 House Selling Sentiment 44.4% 30.8% 8.5% 7.8% 4.0% 4.5% Reasons for Buying Houses (% of Households) 1.7% 26.1% 34.4% 25.5% 3.8% 8.6% Timing for Selling Houses (% of Households) Excellent Time Good Time Neutral Bad Time Very Bad Time Don‘t Know/No Answer Prices Income/Purchasing Power Investment Value Policy/Interest Rate Supply and Quality Others
  44. 44. MNI India Consumer Report - March 201444 The Car Purchase Indicator increased to the highest level in 10 months in March, as car purchase expectations improved and expectations for the price of gasoline remained broadly stable. The indicator rose to 75.3 in March from 73.0 in February. Even though the indicator was above the series average of 72.4, it was still below the level seen during the same month a year earlier. According to the latest data from the Society of Indian Automobile Manufacturers, passenger car sales increased for the first time in five months in February, to 160,718 units, 1.4% above the previous year. The rise in car sales was attributed to price discounting from car manufacturers, following the excise duty reduction on small cars, two wheelers, and commercial vehicles to 8% from 12%. 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, rose by 5.4% on the month to 108.9, from 103.2 in the previous month. Positive expectations led the component to the highest since April 2013, leaving it 1.5% above the level seen in the same period a year earlier. Of those who thought it would be a good time to buy a car, a growing proportion believed it offered good investment value. The Indicator on Gasoline Prices, which measures expectations for the price of gasoline in a year, has remained reasonably high over the past year and it remained broadly stable at 158.3 in March compared with 157.2 in February. Car Purchase Indicator Highest Since May 2013 50 60 70 80 90 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Car Purchase Indicator 80 90 100 110 120 130 140 150 160 170 180 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Car Purchase Indicator - Components Car Purchase Expectations Price of Gasoline Car Purchase Sentiment Mar-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Car Purchase Sentiment 76.6 67.1 65.7 73.8 69.2 73.0 75.3 Car Purchase Expectations 107.3 98.4 97.7 103.0 99.0 103.2 108.9 Price of Gasoline 154.0 164.1 166.3 155.4 160.6 157.2 158.3 75.3
  45. 45. MNI India Consumer Report - March 2014 45 Car Purchase Indicator Regions 108.9 111.2 100.6 119.0 108.5 111.0 All India North India South India East India West India Central India Car Purchase Expectations - Regions All India North India South India East India West India Central India Reasons for a Bad Time to Buy a Car (% of Households) Prices Income/Purchasing Power Policy/Interest Rate Supply and Quality Cost of Use/Upkeep Others Reasons for a Good Time to Buy a Car (% of Households) All India North India South India East India West India Central India Prices Income/Purchasing Power Policy/Interest Rate Supply and Quality Cost of Use/Upkeep Others 0.3% 33.5% 34.6% 13.4% 1.6% 16.5% Is it a Good Time to Buy a Car? (% of Households) Excellent Good Time Neutral Bad Time Very Bad Time Don‘t Know/No Answer
  46. 46. MNI India Consumer Report - March 201446 MNI India Consumer Indicator Regions 112.8 133.3 115.3 142.4 127.4 130.0 110.4 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator Components: North India 90 100 110 120 130 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator: North India 120.0 125.7 124.5 114.6 110.9 151.4 115.5 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator Components: South India 110 115 120 125 130 135 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator: South India
  47. 47. MNI India Consumer Report - March 2014 47 112.7 132.5 109.0 128.2 130.5 138.8 116.4 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator Components: East India 100 110 120 130 140 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator: East India 115.2 135.9 121.7 138.2 128.7 140.8 108.7 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator Components: West India 90 100 110 120 130 140 150 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 Consumer Indicator: West India
  48. 48. MNI India Consumer Report - March 201448 North India South India East India West India Central India Employment Outlook for the Next 12 Months (% of Households) 133.0 133.3 127.3 115.3 142.5 139.8 All India North India South India East India West India Central India Expected Interest Rate on House and Car Loans Indicator Much Better A Little Better About the Same A Little Worse Much Worse Don‘t Know/No Answer 116.5 142.1 126.3 149.2 128.0 149.2 106.8 Current Indicator Expectations Indicator Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions Consumer Indicator Components: Central India 110 115 120 125 130 135 Jun-13 Sep-13 Dec-13 Mar-14 Consumer Indicator: Central India
  49. 49. MNI India Consumer Report - March 2014 49 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) North India South India East India West India Central India Interest Rates Expectations (% of Households) 75.3 69.8 84.7 79.9 71.2 73.7 All India North India South India East India West India Central India Car Purchase Indicator - Regions Much Higher A Little HIgher About the Same A Little Lower Much Lower Don‘t Know/No Answer Excellent Time Good Time Neutral Bad Time Very Bad Time Don‘t Know/No Answer
  50. 50. MNI India Consumer Report - March 201450 MNI India Consumer Indicator Income Groups 115.1 125.9 117.9 143.6 114.5 Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions < INR 432,000 - Components 129.8 121.2 135.6 123.4 114.8 129.2 Total Indicator Current Indicator Expectations Indicator < INR 432,000 per annum 128.6 134.8 121.0 139.7 111.3 Personal Finances: Current Personal Finances: Expected Business Conditions: 1 Year Business Conditions: 5 Years Durable Buying Conditions > INR 432,000 - Components 132.6 123.2 138.9 127.1 120.0 131.9 Total Indicator Current Indicator Expectations Indicator > INR 432,000 per annum February 2014 March 2014 February 2014 March 2014
  51. 51. Consumer confidence declined in both low and high income households. On average, the level of confidence remains greater for higher income households.
  52. 52. Spitzzeile Titel52 A selection of comments from the panel of consumers surveyed over the past month. What the Panel Said
  53. 53. “The price of cars is set to come down since the Finance Minister announced a reduction in excise duty on cars.” “Education and food expenses have gone up so it is not easy to buy goods like TVs and computers.” “Many companies are opening in Pune, so business conditions are better.” “After the elections, companies will start investing.” “People like to have vehicles that are big enough and fuel efficient so many buy diesel cars these days.” “The price of houses and real estate will increase as the area is more developed now.” “If Narendra Modi becomes the Prime Minister, then business conditions would improve in the coming year.” “Most of the companies in Mumbai are moving outside so business conditions will be a little worse over the next year.” “Because of higher daily expenses, a common man can‘t think about buying a car.” “Because of the recent riot in Muzzafarnagar, business was affected a lot but it will surely improve next year.” “Right now the property market is saturated so after six months it will be a good time to buy a house.” “If the government changes, business conditions might improve.” “New companies are coming in Patna.” “The recent rain across India has badly affected vegetable supplies and will lead to higher prices.” MNI India Consumer Report - March 2014 53
  54. 54. w Respondents were looking forward to the national elections in May... ...with an expectation that the new government will help bring down price pressures.
  55. 55. Spitzzeile Titel 55 A closer look at the data from the March consumer survey. Data Tables
  56. 56. MNI India Consumer Report - March 201456 North India Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change NorthI India Consumer Indicator 115.1 122.9 125.1 Nov-12 - 121.0 2.2 1.8% Current Indicator 105.0 113.7 112.8 - Jan-14 110.5 -0.9 -0.8% Expectations Indicator 121.9 129.0 133.3 Nov-12 - 128.1 4.3 3.3% Personal Finance: Current 111.5 121.2 115.3 - Jan-14 116.0 -5.9 -4.9% Personal Finance: Expected 127.4 133.9 142.4 series high - 134.6 8.5 6.4% Business Condition: 1 Year 113.2 125.9 127.4 series high - 122.2 1.5 1.2% Business Condition: 5 Year 125.0 127.2 130.0 Jun-13 - 127.4 2.8 2.2% Durable Buying Conditions 98.4 106.2 110.4 Aug-13 - 105.0 4.2 3.9% Current Business Conditions Indicator 98.2 103.3 90.5 - series low 97.3 -12.8 -12.4% Stock Investment Indicator 105.6 101.6 77.1 - series low 94.8 -24.5 -24.1% Real Estate Investment Indicator 110.0 120.8 116.8 - Jan-14 115.9 -4.0 -3.3% Car Purchase Indicator 70.2 74.7 69.8 - Dec-13 71.6 -4.9 -6.6% Employment Outlook Indicator 107.4 115.3 103.9 - series low 108.9 -11.4 -9.9% Inflation Expectations Indicator 149.6 156.4 158.3 series high - 154.8 1.9 1.2% Current Prices Satisfaction Indicator 75.1 71.3 60.8 - Nov-13 69.1 -10.5 -14.8% Interest Rates Expectations Indicator 133.1 130.7 133.3 Dec-13 - 132.4 2.6 2.0%
  57. 57. MNI India Consumer Report - March 2014 57 South India Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change South India Consumer Indicator 123.1 135.1 123.4 - Jan-14 127.2 -11.7 -8.7% Current Indicator 118.0 132.2 120.0 - Jan-14 123.4 -12.2 -9.3% Expectations Indicator 126.5 137.0 125.7 - Nov-13 129.7 -11.3 -8.3% Personal Finance: Current 123.5 139.2 124.5 - Jan-14 129.1 -14.7 -10.6% Personal Finance: Expected 120.3 142.0 114.6 - series low 125.6 -27.4 -19.3% Business Condition: 1 Year 116.6 125.6 110.9 - series low 117.7 -14.7 -11.6% Business Condition: 5 Year 142.5 143.6 151.4 series high - 145.8 7.8 5.4% Durable Buying Conditions 112.6 125.3 115.5 - Jan-14 117.8 -9.8 -7.8% Current Business Conditions Indicator 118.0 138.6 110.7 - series low 122.4 -27.9 -20.1% Stock Investment Indicator 102.0 104.6 98.2 - Nov-13 101.6 -6.4 -6.1% Real Estate Investment Indicator 109.0 116.2 114.6 - Jan-14 113.3 -1.6 -1.3% Car Purchase Indicator 75.4 82.7 84.7 Jun-13 - 80.9 2.0 2.4% Employment Outlook Indicator 124.0 134.9 125.5 - Jan-14 128.1 -9.4 -7.0% Inflation Expectations Indicator 166.0 156.7 143.6 - Jul-13 155.4 -13.1 -8.4% Current Prices Satisfaction Indicator 73.5 96.2 64.0 - Mar-13 77.9 -32.2 -33.4% Interest Rates Expectations Indicator 137.7 146.8 127.3 - Jun-13 137.3 -19.5 -13.3%
  58. 58. MNI India Consumer Report - March 201458 East India Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change East India Consumer Indicator 119.7 129.4 124.6 - Jan-14 124.6 -4.8 -3.7% Current Indicator 119.3 116.0 112.7 - Sep-13 116.0 -3.3 -2.9% Expectations Indicator 120.0 138.3 132.5 - Jan-14 130.3 -5.8 -4.2% Personal Finance: Current 118.5 122.3 109.0 - Dec-13 116.6 -13.3 -10.9% Personal Finance: Expected 120.0 139.9 128.2 - Jan-14 129.4 -11.7 -8.4% Business Condition: 1 Year 116.9 129.0 130.5 May-13 - 125.5 1.5 1.2% Business Condition: 5 Year 123.1 146.1 138.8 - Jan-14 136.0 -7.3 -5.0% Durable Buying Conditions 120.1 109.7 116.4 Jan-14 - 115.4 6.7 6.0% Current Business Conditions Indicator 100.6 113.5 109.3 - Jan-14 107.8 -4.2 -3.7% Stock Investment Indicator 100.0 - - - - - - - Real Estate Investment Indicator 115.4 132.4 124.2 - Jan-14 124.0 -8.2 -6.2% Car Purchase Indicator 68.8 79.4 79.9 May-13 - 76.0 0.5 0.7% Employment Outlook Indicator 82.5 115.7 111.0 - Jan-14 103.1 -4.7 -4.1% Inflation Expectations Indicator 135.5 149.8 145.1 - Jan-14 143.5 -4.7 -3.1% Current Prices Satisfaction Indicator 69.5 65.0 72.3 Oct-13 - 68.9 7.3 11.2% Interest Rates Expectations Indicator 130.6 120.4 115.3 - Mar-13 122.1 -5.1 -4.2%
  59. 59. MNI India Consumer Report - March 2014 59 West India Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change West India Consumer Indicator 125.8 126.1 127.6 Dec-12 - 126.5 1.5 1.2% Current Indicator 114.4 113.9 115.2 Nov-13 - 114.5 1.3 1.2% Expectations Indicator 133.5 134.3 135.9 Nov-12 - 134.6 1.6 1.2% Personal Finance: Current 126.0 121.6 121.7 Jan-14 - 123.1 0.1 0.1% Personal Finance: Expected 136.0 136.6 138.2 Jan-13 - 136.9 1.6 1.2% Business Condition: 1 Year 128.1 131.1 128.7 - Jan-14 129.3 -2.4 -1.8% Business Condition: 5 Year 136.3 135.2 140.8 Nov-12 - 137.4 5.6 4.1% Durable Buying Conditions 102.8 106.1 108.7 Nov-13 - 105.9 2.6 2.5% Current Business Conditions Indicator 115.7 110.9 105.0 - Sep-13 110.5 -5.9 -5.3% Stock Investment Indicator 99.3 106.6 83.3 - series low 96.4 -23.3 -21.9% Real Estate Investment Indicator 120.3 114.9 116.8 Jan-14 - 117.3 1.9 1.6% Car Purchase Indicator 64.4 62.9 71.2 Dec-13 - 66.2 8.3 13.3% Employment Outlook Indicator 119.3 119.7 120.2 Dec-13 - 119.7 0.5 0.4% Inflation Expectations Indicator 156.2 153.5 160.6 series high - 156.8 7.1 4.6% Current Prices Satisfaction Indicator 79.8 69.7 70.6 Jan-14 - 73.4 0.9 1.3% Interest Rates Expectations Indicator 141.3 134.2 142.5 Nov-13 - 139.3 8.3 6.2%
  60. 60. MNI India Consumer Report - March 201460 Central India Overview Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Central India Consumer Indicator 117.1 125.9 131.9 Apr-13 - 125.0 6.0 4.7% Current Indicator 108.6 113.1 116.5 Dec-13 - 112.7 3.4 3.0% Expectations Indicator 122.7 134.4 142.1 Apr-13 - 133.1 7.7 5.7% Personal Finance: Current 119.1 113.9 126.3 Apr-13 - 119.8 12.4 10.8% Personal Finance: Expected 130.0 133.6 149.2 Apr-13 - 137.6 15.6 11.6% Business Condition: 1 Year 110.9 129.5 128.0 - Jan-14 122.8 -1.5 -1.2% Business Condition: 5 Year 127.3 140.2 149.2 series high - 138.9 9.0 6.4% Durable Buying Conditions 98.2 112.3 106.8 - Jan-14 105.8 -5.5 -4.9% Current Business Conditions Indicator 97.3 114.8 97.5 - Jan-14 103.2 -17.3 -15.1% Stock Investment Indicator 133.3 116.7 - - - - - - Real Estate Investment Indicator 115.5 118.3 125.7 series high - 119.8 7.4 6.3% Car Purchase Indicator 69.1 70.1 73.7 Dec-13 - 71.0 3.6 5.2% Employment Outlook Indicator 108.2 123.8 111.9 - Jan-14 114.6 -11.9 -9.6% Inflation Expectations Indicator 147.3 158.2 163.6 series high - 156.4 5.4 3.4% Current Prices Satisfaction Indicator 77.3 65.6 76.3 Jan-14 - 73.1 10.7 16.3% Interest Rates Expectations Indicator 129.1 136.1 139.8 Sep-13 - 135.0 3.7 2.8%
  61. 61. MNI India Consumer Report - March 2014 61 All India Overview by Age Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change Age 18-34 MNI India Consumer Indicator 123.4 127.5 124.5 - Jan-14 125.1 -3.0 -2.3% Current Indicator 118.0 117.1 114.5 - Sep-13 116.5 -2.6 -2.2% Expectations Indicator 127.0 134.3 131.2 - Jan-14 130.8 -3.1 -2.4% Personal Finance: Current 124.2 124.6 121.1 - Sep-13 123.3 -3.5 -2.9% Personal Finance: Expected 130.0 141.1 131.5 - Jan-14 134.2 -9.6 -6.9% Business Condition: 1 Year 117.3 126.0 121.6 - Jan-14 121.6 -4.4 -3.5% Business Condition: 5 Year 133.6 135.8 140.4 series high - 136.6 4.6 3.4% Durable Buying Conditions 111.8 109.7 108.0 - Sep-13 109.8 -1.7 -1.5% Age 35-54 MNI India Consumer Indicator 121.4 130.2 126.6 - Jan-14 126.1 -3.6 -2.8% Current Indicator 112.6 121.7 117.1 - Jan-14 117.1 -4.6 -3.8% Expectations Indicator 127.2 135.9 133.0 - Jan-14 132.0 -2.9 -2.2% Personal Finance: Current 121.3 127.9 119.4 - Aug-13 122.9 -8.5 -6.7% Personal Finance: Expected 128.2 137.0 134.7 - Jan-14 133.3 -2.3 -1.7% Business Condition: 1 Year 120.2 130.4 124.0 - Jan-14 124.9 -6.4 -4.9% Business Condition: 5 Year 133.1 140.2 140.1 - Jan-14 137.8 -0.1 -0.1% Durable Buying Conditions 104.0 115.5 114.8 - Jan-14 111.4 -0.7 -0.6% Age 55-64 MNI India Consumer Indicator 116.9 120.5 127.3 series high - 121.6 6.8 5.7% Current Indicator 106.2 109.8 114.1 Dec-13 - 110.0 4.3 3.9% Expectations Indicator 124.0 127.6 136.1 series high - 129.2 8.5 6.7% Personal Finance: Current 109.9 117.8 113.6 - Jan-14 113.8 -4.2 -3.5% Personal Finance: Expected 119.8 128.6 131.9 Dec-12 - 126.8 3.3 2.5% Business Condition: 1 Year 122.8 126.1 133.1 series high - 127.3 7.0 5.5% Business Condition: 5 Year 129.5 128.0 143.3 series high - 133.6 15.3 12.0% Durable Buying Conditions 102.6 101.9 114.6 Jul-13 - 106.4 12.7 12.5%
  62. 62. MNI India Consumer Report - March 201462 All India - Overview by Income Jan-14 Feb-14 Mar-14 Highest Since Lowest Since 3-Month Average Monthly Change Monthly % Change < INR 432,000 per annum MNI India Consumer Indicator 120.7 129.8 123.4 - Jan-14 124.6 -6.4 -5.0% Current Indicator 114.8 121.2 114.8 - Jan-14 116.9 -6.4 -5.3% Expectations Indicator 124.6 135.6 129.2 - Jan-14 129.8 -6.4 -4.8% Personal Finance: Current 121.9 127.0 115.1 - Jul-13 121.3 -11.9 -9.4% Personal Finance: Expected 121.9 139.1 125.9 - Jan-14 129.0 -13.2 -9.5% Business Condition: 1 Year 118.1 130.5 117.9 - Dec-13 122.2 -12.6 -9.6% Business Condition: 5 Year 133.9 137.3 143.6 series high - 138.3 6.3 4.6% Durable Buying Conditions 107.6 115.4 114.5 - Jan-14 112.5 -0.9 -0.8% > INR 432,000 per annum MNI India Consumer Indicator 120.9 132.6 127.1 - Jan-14 126.9 -5.5 -4.2% Current Indicator 111.5 123.2 120.0 - Jan-14 118.2 -3.2 -2.6% Expectations Indicator 127.1 138.9 131.9 - Jan-14 132.6 -7.0 -5.1% Personal Finance: Current 114.1 134.1 128.6 - Jan-14 125.6 -5.5 -4.2% Personal Finance: Expected 124.1 142.9 134.8 - Jan-14 133.9 -8.1 -5.6% Business Condition: 1 Year 121.6 128.0 121.0 - Sep-13 123.5 -7.0 -5.4% Business Condition: 5 Year 135.7 145.9 139.7 - Jan-14 140.4 -6.2 -4.2% Durable Buying Conditions 108.8 112.2 111.3 - Jan-14 110.8 -0.9 -0.8%
  63. 63. MNI India Consumer Report - March 2014 63 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 ago 2) Current willingness to buy major household items 3) Personal financial situation one year from now 4) Overall business conditions one year from now 5) 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.
  64. 64. Published by MNI Indicators | Deutsche Börse Group Westferry House 11 Westferry Circus London E14 4HE www.mni-indicators.com @MNIIndicators.com Copyright© 2014 MNI Indicators | Deutsche Börse Group. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved.

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