Cobham : Consumer Expectations Survey Report for the Fourth Quarter of 2019

Central Bank of Nigeria

Statistics Department

Consumer

Expectations

Survey Report

Q4 2019

December 2019

TABLE OF CONTENTS
		Page
1.0	Highlights	3
2.0	Introduction	3
3.0	Consumer Outlook	4
3.1	Consumer Overall Confidence Index	4
3.2	Outlook on Price Changes in the Next 12 Months	4
	3.2.1 Buying Outlook	4
3.3	Borrowing and Exchange Rates Outlook	5
3.4	Unemployment Outlook	5
Technical Notes	6
List of Figures
Fig. 1: Nationwide Consumer Outlook Index	4
Fig. 2: Outlook on Price Changes in the Next 12 Months	4
Fig. 3: Buying Conditions Index	4
Fig. 4: Buying Intention Index	5
Fig. 5: Indices of selected economic indicators: next 12 months	5
Annex: Table
Table 1: Consumer Expectations Survey data	7

A Quarterly Publication of the Central Bank of Nigeria

4th Quarter, 2019

1.0 Highlights

The highlights of the Q4 2019 Consumer Expectations Survey (CES) are as follows:

• Consumers' overall outlook was positive in the current quarter, as consumers were optimistic in their outlook. Consumers also had a positive outlook for the next quarter and the next 12 months.
• Majority of consumers believe that the next 12 months would not be an ideal time to purchase big-ticket items like motor vehicles and house & lot.
• Most respondents expected the naira to remain unchanged, inflation rate to rise, and borrowing rate to fall in the next 12 months.
• The major drivers of the expected upward movement in prices are food & other household needs, savings, purchase of appliances/consumer durables, education and purchase of houses, and purchase of car/motor vehicle.

2.0 Introduction

The Q4 2019 Consumer Expectations Survey (CES) was conducted during the period November 18-27, 2019, covering a sample size of 2,070 households drawn from 207 Enumeration Areas (EAs) across the country, with a response rate of 99.9 per cent.

Respondents' distribution by educational attainment showed that 8.6 per cent had university education, 10.7 per cent had higher non-university education, while 26.9 per cent had senior secondary school education. Respondents with junior secondary and primary school education accounted for 4.9 and 19.7 per cent, respectively, while those with no formal education accounted for the balance of 29.3 per cent.

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1. Consumer Outlook
2. Consumer Overall Confidence
   Index
   The consumers' overall confidence outlook rose in Q4 2019, as consumers were optimistic in their outlook. The index at 3.3 points was 6.4 points lower than the index in the corresponding period of 2018. Respondents attributed this favourable outlook to improved family income and family financial situation. The consumer outlooks for the next quarter and next 12 months were positive at 19.7 and 30.2 points, respectively (Fig. 1). This outlook could be attributed to the expected increase in net household income, expectations to save a bit and/or have plenty over savings and an anticipated improvement in Nigeria's economic conditions in the next 12 months (Table 1).
3. Outlook on Price Changes in the Next 12 Months
   Most respondents expect prices of goods and services to rise in the next 12 months, with an index of 17.0 points. The major drivers are: food & other household needs, savings, purchase of
   appliances/consumer durables, education, purchase of houses, and purchase of car/motor vehicle (Fig. 2).

3.2.1 Buying Outlook

The overall buying conditions index for big-ticketitems in the current quarter stood at 29.7 points. This indicates that majority of consumers believed that the current quarter was not the ideal time to purchase big-ticketitems like consumer durables, motor vehicles and house & lot (Fig 3).

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Overall buying intention index in the next twelve months stood at 36.5 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 & lot were below 50 points, indicating that respondents have no plans to make these purchases in the next twelve months (Fig 4).

3.3 Borrowing and Exchange Rates Outlook for the next 12 Months

With indices of -6.3 and 16.5 points, respectively, consumers expect the borrowing rate to fall, but expect the naira to appreciate in the next 12 months (Fig. 5).

3.4 Unemployment Outlook for the next 12 Months

The unemployment index for the next 12 months remained positive at 21.0 points in Q4 2019, indicating that consumers generally expect the unemployment rate to rise in the next one year (Fig. 5).

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TECHNICAL NOTES

1. The Overall consumer confidence index is computed as the average of the three indices, namely: Economic Condition, Family Financial Situation and Family Income.
2. 1. Economic Condition refers to the perception of the respondent regarding the general economic condition of the country.
   2. Family Financial Situation refers to the level of savings, investments, other assets including cash at hand and outstanding debts.
   3. Family Income includes primary income and receipts from other sources received by all family members as participants in any economic activity or as recipients of transfers, pensions, grants, and the like.
3. The confidence index or diffusion index is computed as the percentage share of respondents that answered in the affirmative less the percentage share of respondents that answered negative in a given indicator.
4. A positive CI indicates that respondents with a favorable view outnumber those with an unfavorable view, except for unemployment, change in prices and interest rate for borrowing money, where a positive CI indicates the opposite.
5. Buying condition and buying intention indices refer to the assessment of consumers as to whether it is good time, neither good nor bad, or bad time to buy assets (i.e. consumer durables, house and lot, and motor vehicles) during the quarter. An index above 50 means more respondents indicated that it is a good time to buy assets; below 50 means more respondents believe that it would not be an appropriate time to make those purchases; and 50 means the number of respondents on both sides is equal.

BCI = 0.5(100+DI), where DI = diffusion index

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ANNEX: TABLES

TABLE 1

CONSUMER EXPECTATIONS SURVEY

Year	2016		2017					2018				2019
Quarter	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
1. Overall Consumer Confidence Index
All Sectors
Current Quarter	-29.8	-29.4	-17.0	-10.5	1.0	-6.4	-6.3	1.5	9.7	4.8	1.2	3.8	3.3
Next Quarter	15.9	17.5	21.3	19.0	28.1	20.8	16.2	24.7	33.2	26.3	20.9	22.8	19.7
Next 12 months		29.9	27.2	34.2	34.8	34.4	28.5	21.2	30.1	28.4	38.5	30.5	31.5	30.2
2. Consumer outlook indices on the current economic and family condition: Current Quarter
Economic Condition	-31.8	-29.5	-9.7	1.7	-4.3	-16.9	-14.3	-6.5	6.3	-7.0	-8.0	-5.8	-8.0
Family Financial Situation	-30.5	-31.6	-26.0	-28.0	-5.6	-7.1	-7.0	-0.5	9.0	7.2	4.5	6.3	7.0
Family Income		-27.1	-27.2	-15.5	-5.1	12.8	4.9	2.4	11.5	13.9	14.1	6.9	10.9	11.1
3. Consumer outlook indices on economic and family condition: Next Quarter
Economic Condition	21.3	8.7	29.4	25.7	30.5	25.5	19.1	27.5	34.7	26.6	21.5	21.7	16.3
Family Financial Situation	-3.8	-6.4	4.4	9.3	18.8	11.1	8.3	17.6	28.3	20.2	15.4	18.1	16.8
Family Income		30.3	50.3	30.0	21.9	35.0	25.7	21.3	29.1	36.5	32.1	25.6	28.5	26.0
4. Consumer outlook indices on economic and family condition: Next 12 Months
Economic Condition	27.7	19.9	33.6	31.2	32.7	28.8	22.1	32.9	31.7	36.4	26.6	24.3	21.1
Family Financial Situation	1.6	0.4	8.8	12.8	26.0	19.7	12.4	21.8	25.7	34.7	27.0	29.6	29.7
Family Income		60.4	61.2	60.2	60.5	44.6	37.1	29.0	35.5	27.7	44.5	37.8	40.7	39.8
5. Buying Conditions Index: Current Quarter
Buying Conditions Index	34.4	33.1	38.2	40.4	40.3	34.3	32.0	35.1	46.1	28.7	29.5	30.3	29.7
Consumer Durables	36.4	36.4	42.3	47.4	39.8	36.4	33.6	37.0	49.6	36.6	38.6	41.8	40.4
Motor Vehicle	34.3	32.2	37.4	39.1	43.3	34.6	33.3	36.0	46.6	26.5	25.6	25.7	25.0
House & Lot		32.6	30.7	34.9	34.7	37.8	31.8	29.0	32.3	42.1	23.1	24.3	23.4	23.6
6. Buying Intention Index: Next 12 Months
Buying Intentions Index	44.6	43.4	48.0	47.0	53.8	45.5	42.6	46.4	40.7*	39.5	37.5	36.2	36.5
Consumer Durables	50.8	50.2	54.4	56.6	58.9	48.6	48.6	53.5	48.3	52.7	50.0	48.4	49.3
Motor Vehicle	41.7	39.9	45.4	43.2	53.8	46.1	41.9	44.5	33.2	35.1	32.1	31.0	30.7
House & Lot		41.2	40.1	44.2	41.3	48.8	41.9	37.4	41.3	40.5*	30.9	30.4	29.2	29.7
7. Indices on Selected Economic Indicators: Next Quarter
Unemployment Rate Index	18.1	21.3	19.1	19.2	33.4	34.6	30.2	35.7	30.4	18.7	21.3	24.2	25.7
Borrowing Rate index	3.5	8.9	-1.5	-6.4	9.1	5.5	-0.2	1.2	-6.3	-3.1	-3.6	-5.5	-5.5
Exchange Rate	-2.2	-8.2	7.5	7.0	14.1	11.1	1.2	5.1	19.3	3.2	-4.1	0.7	0.0
Inflation Rate index		21.7	26.3	18.3	15.9	2.5	5.8	0.4	2.7	0.3	10.4	13.5	21.1	16.9
8. Indices on Selected Economic Indicators: Next 12 Months
Unemployment Rate Index	18.1	21.3	19.1	19.2	24.2	26.6	23.3	25.0	29.3	13.1	16.6	21.8	21.0
Borrowing Rate index	3.5	8.9	-1.5	-6.4	3.7	1.9	-1.2	-2.6	5.0	-6.2	-6.0	-6.2	-6.3
Exchange Rate	-2.2	-8.2	7.5	7.0	30.9	24.1	15.0	16.4	6.6	20.7	11.9	13.9	16.5
Inflation Rate index		20.1	24.2	16.9	14.7	13.0	16.2	13.2	16.7	13.3	15.9**	19.3	25.0	17.0
9. Sectors Contribution to price changes over the next 12 months
Food & Other household needs	22.4	39.7	15.6	9.3	10.5	19.3	17.4	14.3	28.0	17.4	12.0	25.3	30.8
Education	36.6	40.7	34.0	32.8	32.4	33.4	33.1	28.2	4.8	26.1	28.4	37.7	27.3
Medical Expenses	36.3	40.9	32.0	28.8	24.9	28.2	29.2	26.8	5.7	-7.3	1.8	3.0	-2.0
Purchase of Appliances/ Consumer durables	29.0	32.1	18.1	16.5	2.6	7.0	8.6	14.4	8.0	25.7	29.9	41.7	28.7
Telecommunication	21.5	32.8	21.2	18.9	15.4	15.6	16.1	19.0	23.6	6.7	11.6	4.1	-2.2
Electricity	36.0	39.5	29.1	26.1	26.4	25.2	25.7	26.6	18.9	14.4	19.9	22.2	16.9
Rents	45.7	47.3	39.7	31.7	26.0	25.4	22.8	22.0	31.1	11.1	15.7	11.9	4.3
Transportation	33.4	42.1	29.5	26.9	26.4	31.7	27.7	32.7	-3.9	16.4	20.5	29.3	16.3
Debt Payment	0.0	0.0	0.0	0.0	5.7	3.6	-4.1	3.9	16.1	19.0	21.2	25.4	15.1
Investment	0.0	0.0	0.0	0.0	0.7	3.4	-3.2	2.9	6.9	14.3	17.7	24.2	15.7
Purchase of Car/Motor Vehicle	0.0	0.0	0.0	0.0	3.6	9.7	3.0	12.6	9.9	15.7	22.3	31.4	18.9
Purchase of House	0.0	0.0	0.0	0.0	4.2	9.7	7.0	15.4	14.7	20.9	22.6	30.5	21.3
Savings		0.0	0.0	0.0	0.0	-9.2	-1.7	-11.5	-1.9	8.4	26.3	27.4	38.9	29.7
10. Percentage of Respondents by Educational Attainment
Primary School	3.2	2.3	3.0	2.8	2.2	17.2	18.5	18.9	6.7	20.3	19.0	19.3	19.7
Junior School	3.0	3.5	4.1	5.8	2.4	6.4	7.2	6.8	16.2	5.7	5.5	5.0	4.9
Senior School	14.3	16.7	15.5	18.0	15.6	23.8	24.9	26.8	29.1	27.0	26.6	27.8	26.9
Higher non-university education	30.5	29.6	27.6	29.7	25.3	16.6	14.9	14.8	22.9	10.3	9.7	11.7	10.7
University	46.8	45.2	47.3	41.8	53.6	17.7	15.2	14.8	22.0	7.1	8.7	7.3	8.6
None		2.3	2.7	2.5	1.9	1.0	18.3	19.5	17.9	3.1	29.7	30.5	28.9	29.3
11. Total Sample Households and Response Rate
Number of Sample Households	1950	1950	1950	1950	1950	2070	2070	1770	1770	2006	2006	2070	2070
Number of Respondents	1940	1947	1950	1926	1948	1729	1664	1716	1755	1996	2004	2035	2067
Response Rate	99.5	99.8	100.0	98.8	99.9	83.5	80.4	96.9	99.2	99.5	99.9	98.3	99.9

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