Consumer confidence index stable: Danareksa

Consumer confidence index stable: Danareksa

JAKARTA (JP): The consumer confidence index, made up of the
present situation index and the expectations index, showed little
movement in December, according to a survey by the Danareksa
Research Institute.

The index was at 56.4 in December, up slightly from the 56.8
the previous month. The increase in the expectations index, from
70.1 to 71.8, offset a decrease in the present situation index,
which went from 38.9 to 36.0.

These movements highlight the people's optimism that the
current conditions will give way to improved economic prospects,
Danareksa said in its report.

The respite that the consumer confidence index found in the
last two months has not led to a reversal in its fortunes, with a
downward trend still evident. The index, which has steadied over
the last two months, continues to display an erosion of
confidence, the report said.

It said that the downward trend suggested that people faced
more downside in the present situation despite better
expectations for the future.

"It will be interesting to see if a brighter future emerges to
justify the people's optimism in the economy or if their
expectations are dashed," it added.

The higher expectations index reflects people's anticipation
of two major changes in the economy.

Most people expect the economy to move from a "bad state" to a
"normal state", the report said.

This expectation of improvement will generate additional
demand for labor, and as a result an improved job market. Survey
respondents expected that "jobs will be not so plentiful" in the
next six months, an improvement from their view that jobs are
"hard to get" at present.

Currently, although the local economy appears normal, most
people believe it is in bad shape. Respondents were more
convinced in December as compared to November that jobs "are hard
to get".

The index measuring job security dropped from 84.8 to 81.8,
and it is the perceived difficulty of finding a job that has
dragged down the present situation index.

Regardless of the poor current conditions, consumers remained
confident that things are getting better, Danareksa said. "They
are even more convinced that local economic conditions remain
unchanged and that overall economic conditions are not as bad as
in the previous month."

This more optimistic assessment leads them to hold brighter
expectations for the next six months.

"With higher optimism that family income and local economic
conditions will remain unchanged, they had higher confidence that
the economy is moving to a normal state, where there is no major
change in the economy," it said.

The percentage of consumers who have no plan to purchase
durables decreased from 73.2 percent in November to 70.6 percent
in December. (05)