Mon, 13 Mar 2000

Consumer trust recovered in February

JAKARTA (JP): Consumer confidence rebounded in February after falling in the previous two months, according to a research agency of the state-owned investment bank PT Danareksa.

The Danareksa Research Institute said a survey of 1,700 respondents in six regions in the country found that the consumer confidence index rose to 66.1 last month from 63.8 in January.

"It is by no means a surprise because consumer confidence had fallen too far in the previous two months," the institute said.

The index jumped in November on account of euphoria following the election of President Abdurrahman Wahid the previous month, but then it fell in December and again in January. The fluctuations indicate that the index "remains fragile", it said.

"Consumers are now more realistic in their outlook," the institute said, adding that it closely scrutinized the government's economic agenda and the political situations before assessing its level of confidence.

Two other indices monitored monthly also improved in February: the Present Situation Index rose to 45.9 from 43.9 in January and the Expectation Index to 81.3 from 78.7.

A reading above 50 in any of the three indices means that the positive responses outnumber negative responses.

The respondents were selected to represent different consumer characteristics, demographically and economically.

The research institute said the respondents who rated present economic conditions as "good" increased to 22.7 percent from 22.0 percent, while those holding the opposite view fell to 35.5 percent from 36.0 percent.

The proportion of respondents who felt that jobs were "hard to get" increased to 54.9 percent from 54.6 percent but those who said jobs were "plentiful" also rose to 21.5 percent from 20.0 percent.

The survey found a mixed perception on the consumers' short- term economic outlook. Those expecting conditions to improve over the next six months rose to 56.2 percent from 55.6 percent, but the proportion of those expecting the condition to worsen also increased to 7.6 percent from 7.2 percent.

Consumers continued to maintain a positive view of the short- term employment outlook. While the percentage of respondents expecting more jobs in the next six months stayed unchanged at 25 percent, the number anticipating fewer opportunities fell to 11.4 percent from 16.8 percent in January.

Income expectations improved slightly in February, with 37.2 percent respondents saying they expected an increase, up from 36.6 percent in January. The percentage anticipating a decline in their income dropped to 9.9 percent from 10.9 percent. (10)