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Consumers’ overall confidence index dipped -21.2 points in Q3 on worsening economy

Consumers’ overall index and outlook dipped by -21.1 points in the third quarter (Q3) of 2020 from 3.8 points in the corresponding quarter in 2019, Nigeria’s central bank said in Q3 2020 Consumer Expectations Survey (CES) released weekend.

The negative confidence is attributed to unfavourable outlook to declining economic conditions, family financial situation and declining family income.

Economic condition worsened further by -41.3 index points in Q3 2020 from -5.8 points in Q3 2019.

Family financial situation contracted by -9.6 points in Q3 2020 compared to the healthy situation of 6.3 index points in Q3 2019. Family income index was as low as -12.8 points in Q3 2020 from the strength of 10.9 points in the corresponding period of 2019.

The Q3 2020 CES was conducted during the period September 21 – 30, 2020, covering a sample size of 2,070 households drawn from 207 enumeration areas across the country, with a response rate of 99.8 percent.

The consumers were however optimistic in their outlook for the fourth quarter (Q4) 2020 and next 12 months with indices of 10.1 and 30.5 points, respectively. The positive outlook could be attributed to the expected increase in net household income, an anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty over savings in the next quarter and the next 12 months.

Most respondents expect prices of goods and services to rise in the next 12 months, with an index of 36.2 points. The major drivers are: savings, purchase of car/motor vehicle, purchase of appliances/durables, education, food and other household needs and purchase of houses.

The overall buying conditions index for big-ticket items in the current quarter stood at 20.1 points. This indicates that majority of consumers believed the current quarter was not the ideal time to purchase big-ticket items like consumer durables, motor vehicles, and house and lot.

Overall buying intention index in the next 12 months stood at 29.7 index points, indicating that most consumers do not intend to buy big-ticket items in the next 12 months. The buying intention indices for consumer durables, motor vehicles and house and lot were below 50 points, which shows that respondents have no plans to make these purchases in the next 12 months.

With indices of 20.8 and 5.3 points, consumers expect the borrowing rate to rise, and anticipate the naira to appreciate in the next 12 months.

The unemployment index for the next 12 months remained positive at 35.4 points in Q3 2020, indicating that consumers generally expect unemployment rate to rise in the next one year, the report indicated.