According to the latest survey “Consumer Confidence of Ukrainians”, conducted by Info Sapiens and financially supported by Dragon Capital, the Consumer Confidence Index (CCI) equals 95.6 in August, which is 7.6 points higher, than the indicator in July. The Index of Expectations of the Country’s Economic Development over the next five years increased the most.
In August 2019 the Consumer Confidence Index (CCI) equaled 95.6, that is 7.6 points higher than the indicator in July.
Index of the Current Situation (ICS) increased by 6.6 points to the level of 83.5. The components of this index have changed as follows:
- – Index of Current Personal Financial Standing (х1) equaled 77.4, which is 6.9 points higher than the indicator in July;
- – Index of Propensity to Consume (х5) increased by 6.3 p. and reached the indicator of 89.6.
In August, Index of Economic Expectations (ІЕE) increased by 8.3 points to the level of 103.6. The components of this index have changed as follows:
- – Index of Expected Changes in Personal Financial Standing (х2) increased by 7.4 points comparing to the previous month and reached 94.3;
- – Index of Expectations of the Country’s Economic Development Over the Next Year (х3) increased by 7.4 points and equals 106.9;
- – Index of Expectations of the Country’s Economic Development over the Next 5 Years (х4) increased and equals 109.6, which is 10.0 points higher than in July.
In August, the indicator of Index of Expectations of Changes in Unemployment equaled 111.1, which is 3.3 points lower than previous month. Meanwhile, Index of Inflationary Expectations decreased and equals 173.2, which is 3.9 points lower than last month. The expectations of Ukrainians regarding the hryvna’s exchange rate in the coming three months also have slightly improved: Index of Devaluation Expectations decreased by 0.7 points and reached the level of 128.8.
«The Consumer Confidence Index in population 16+ is close to the point 100 (95.6 p.) while among those who are aged 16-59 years it is above 100 (101 p.). These are CCI levels which were observed in Ukraine in 2004-2008 (until August 2008) and in few months of 2010 (April-June). Thus, the Index is back on the level before the crisis of 2008-2009 years. In 2019 the biggest growth show Indices of expected economic development, moreover in July-August 2019 they are even higher then in 2004-2008. At the same time Indices of Current Personal Financial Standing and Propensity to Consume in July-August 2019 are still lower than they were before the 2009 crisis.» - Info Sapiens analysts comment.
How the indices are calculated
The survey «Consumer confidence in Ukraine» was conducted by GfK Ukraine since June 2000. From 2019 this project is provided by Info Sapiens. From January 2009 consumer confidence survey is conducted on a monthly basis.
In Ukraine, the Consumer Confidence Index is determined through a random survey of domestic households. The poll involves 1,000 individuals aged 16+. (Up to April 2014 the poll involved 1,000 respondents aged 15-59). A representative sample is selected by gender and age, also by type and size of settlement. In April 2014 Autonomous Republic of Crimea was excluded from the sample of consumer confidence research in Ukraine. The margin of error is 3.2%. The survey is carried out on 1-15th every month. To define the CCI, respondents are asked these questions:
- 1. How has the financial standing of your family changed over the last six months?
- 2. How do you think your family’s financial standing will change in the next six months?
- 3. Looking at economic conditions in the country as a whole, do you think the next 12 months will be good or bad?
- 4. Looking at the next five years, will they be good ones or bad ones for the country’s economy?
- 5. In terms of large purchases for your home, do you think now is generally a good time or a bad time to make such purchases?
Each of these questions is related to a corresponding index:
- • index of Current Personal Financial Standing (x1);
- • index of Expected Changes in Personal Financial Standing (x2);
- • index of Expected Economic Conditions in the Country Over the Next Year (x3);
- • index of Expected Economic Conditions in the Country Over the Next 5 Years (x4);
- • index of Propensity to Consume (x5).
Indices are constructed thus: the share of negative answers is deducted from the share of positive answers, and 100 is added to this difference in order to eliminate negative values. On the basis of these five indices, three aggregate indices are calculated:
- • consumer Confidence Index (CCI) as the arithmetic average of indices x1–x5;
- • index of the Current Situation (ICS) as the arithmetic average of indices x1 and x5;
- • index of Economic Expectations (IEE) as the arithmetic average of indices x2, x3, and x4.
Index values range from 0 to 200. The index equals 200 when all respondents positively assess the economic situation. It totals 100 when the shares of positive and negative assessments are equal. Indices of less than 100 indicate the prevalence of negative assessments. To determine the Index of Expected Changes in Unemployment (IECU), the Index of Inflationary Expectations (IIE) and the Index of Devaluation Expectations (IDE), the respondents are asked these three questions:
- 1. Do you think that within next 12 months the number of unemployed (people who do not have job and are looking for work) will increase, will remain roughly the same, or will decrease?
- 2. How do you think that prices for major consumer goods and services will change in the next 1–2 months?
- 3. How do you think the USD value will change towards the UAH value during the next 3 months?
The IECU, the IIE and the IDE are calculated thus: the share of answers that indicate a decrease of unemployment/inflation/devaluation is subtracted from the share of answers that indicate the growth of unemployment/inflation/devaluation, and 100 is added to the difference to eliminate negative values. The values of indices can vary from 0 to 200. The index totals 200 when all residents expect an increase in unemployment/inflation/devaluation.