Consumer confidence would worsen in coming weeks-survey

Consumer confidence remained extremely pessimistic through May 2022, according to the Institute of Health Policy (IHP)’s Index of Consumer Sentiment, and would worsen in coming weeks.

It said consumer expectation and current conditions remain highly pessimistic, unchanged from April.

This is stated in IHP May 2022 update of its Consumer Confidence Indices, which are being trialled as part of its Sri Lanka Opinion Tracker Survey (SLOTS).

Throughout May, all IHP’s consumer confidence indices have remained at extremely low levels. Leading up to the country-wide protests and the resignation of the Prime Minister on May 9, some small improvements were seen in the Index of Consumer Expectation (ICE), which measures the public’s expectations about the future, and the Index of Consumer Sentiment (ICS), which measures the public’s views on their personal economic status and the national economy, the IHP said.

However, despite the resignation of the Prime Minister, and subsequent appointment of a new Prime Minister, there was no improvement in any of the indices. This may be reflective of the country’s continued difficulties in ensuring essentials such as fuel, electricity, essential food items and other goods and services.

Public continue to be pessimistic about the situation in the future

Through May, the ICE, which reflects sentiments of the future, has mostly remained at or below the Index of Current Conditions (ICC), a broad measure of perceptions about current condition. Dr Ravi Rannan-Eliya, lead investigator for the survey, commented that regardless of small fluctuations in short-term sentiments, the long-term future sentiments of the public remain bleak.

Four of the five components comprising the three indices stayed at similar levels. In keeping with long-term pessimism, sentiments on country long-term prospects and current buying conditions declined slightly. All indices and components of these remain at extremely pessimistic levels below 10.

Adapting standard questions used globally to track consumer sentiment, SLOTS has been tracking consumer sentiment daily since September 2021. Three separate indices are currently tracked on a weekly and daily basis, covering views about current conditions, expectations about future conditions, and views about buying major household items. Data are obtained from phone interviews of a national sample of respondents, with the results adjusted to ensure they are representative of the Sri Lankan population in all provinces and at all income levels, the IHP said.