Index of the consumers' environment
Chilly consumer environment for three years in a row
The total "bluing" of the chart representing the change in the consumer environment index relative to the defined basis, which was comparatively neutral in the first half year of 2005, indicates that there are no serious signs of the expected positive change in the abilities and the actual consumer behaviour of the Bulgarian population.
The change relative to the preceding period - the first half of 2011, is slightly positive, but quite insufficient to compensate for the vast collapse of the period from first half of 2009 till the first half of 2010. The only positive aspect in the situation as a whole is that the return to the values of the index of the consumer environment from that most difficult period is out of the question. The index has been crawling around the same values over the last 18 months and is not promising any fast recovery of consumers' demand, which would invigorate the economy. It should be kept in mind, that the unfavourable cold season is beginning, and people's basic expenses rise significantly, so this will reduce the demand even further.
Against this background, there is a noticeable dissonance in consumers' evaluations of their current situation - and the overall economic situation, and their expectations about their income and overall financial status in the coming months. Regarding the current situation, there are some weak signs of increase in the share of positive evaluations. However, relative to the preceding period, a sharp increase was registered in the forecasts of lower earnings in the coming months. Practically these forecasts are back to their level of the worst period of 2009-2010. The share of the individuals, who expressed some positive expectations about their earnings, has dropped below the 5% limit just once - in mid 2009; currently this is the second time.
An additional, very heavy limitation to sales of goods and services is set by the dynamics in consumers' attitude to discretionary fund management - the direction of this dynamics remains unchanged, but the rate dramatically increases. Since the moment when the population for the first time experienced effects of the economic crisis, the intent for any purchases or investments in any kind of financial instruments has decreased steeply, in contrast to the strongly defined intent to put discretionary funds in bank deposits. Currently, the share of banks as the preferred money box is at its absolute peak, that has ever been registered since the redenomination of the Bulgarian lev.
It should be noted however, that at present a notable and strong separation of the society is registered. Large part of people are expecting either a continuous aggravation of their financial and material status, or a stagnation of their status at the comparatively low level of 2009-2010. In contrast, this is the first time since the most difficult period that an increase is registered for the group of individuals, who state that their financial status allows them to have almost everything they need or want. This group shrunk to about 3% of the total population in the period 2009-2010, but currently it is above the 5% limit. This is a sign, that at least this group has gained stability or - even better, that its improved financial status is the first symptom of the improvement of the overall situation - which can hardly be expected to become more conspicuous before the end of the cold season.
Data are from a national representative marketing survey of the adult population in Bulgaria, carried out by Progress consult in December among 1041 individuals.
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