Consumer sentiment in Ukraine has improved after falling at the beginning of the year: the consumer confidence index after a decrease of 3 points in the first quarter grew by 4 points in the second quarter, to 62 (on a scale of 0 to 200), according to a study by The Conference Board, prepared jointly with Nielsen. “The growing trend encourages, while consumers remain very cautious due to the unstable economic situation in the country,” Nielsen’s press release quotes Nielsen Managing Director for Ukraine and Belarus Vaios Dimoragas as saying.
He noted that the record low level of consumer confidence in Ukraine was recorded in 2015 at 41 points.
The company states the improvement of the index is due to the improvement by consumers of estimates of prospects in the labor market and their financial well-being. At the same time, the indicator of readiness to spend money is relatively stable for the fourth consecutive quarter.
The study says the absolute majority of Ukrainians continue to believe that the country is in a state of crisis, while the number of such declined to 92% in the second quarter of 2018 compared to 95% in the first quarter. The number of those consumers who believe that the country will not get out of the crisis in the next 12 months is stable.
The list of worries is headed by the war – 31% of Ukrainians are concerned about it. The growth of housing and utilities services tariffs ranks second – 29% of consumers are concerned about it. They are followed by such reasons for concern as the economy and rising prices for food and health.
The index of consumer confidence of Ukrainians in June 2018 after a three-month positive trend increased by 2.7 points, to 65.6 (hereinafter on a scale from zero to 200) compared with the May index, and in annual terms it showed an increase of 6.2 points, according to a monthly research by GfK Ukraine. According to research, the index of current personal financial standing showed the greatest positive dynamics, having increased by 8.8 points in comparison with May 2018, to 59.6. “This result might be associated with the gradual growth of real income of the population, as well as with the fact that there is decline in prices of basic food commodities in summer,” GfK Ukraine analysts note.
The index of expected changes in personal financial standing rose by 6.2 points, to 67.3, and in general the index of the current situation in monthly comparison grew by 5.1 points, to 65.5 points, GfK Ukraine said.
Ukrainians in June this year were optimistic about the expectations of the country’s economic development over the next five years: the corresponding index rose by 3.3 points compared to the May figure, to 56.4. Ukrainians also showed a propensity for optimism with respect to inflation expectations: this index fell by 3.4 points, to 187, the study shows.
The consumer confidence index of Ukrainians after a two-month positive trend in May this year improved by another 1.5 points, to 62.9 compared with the April indicator, while in annual terms it grew by 4.9 points, according to monthly research by GfK Ukraine. Ukrainians were optimistic about unemployment – the corresponding index sank by 5.3 points compared to April 2018, to 125.5, according to the study.
Positive dynamics was also shown by the index of propensity to consume: this indicator grew by 3.7 points from the previous month, to 69.8, GfK Ukraine said.
“This index received the most positive dynamics in the following groups: lower than average income, in the cities with the population of more than 100,000 people and in the group of elderly people. This result might be associated with the end of the heating season and releasing funds in these groups,” the report on the website of the group reads.
The third month in a row, Ukrainians remain optimistic about economic growth. The index of expectations of the country’s economic development over the next five years increased most of all, by 2.7 points, to 70.1, while the index of expected changes in personal financial standing showed an increase of 1.7 points, to 61.2. In general, the index of economic expectations in May rose by 1.6 points, to 64.6, although Ukrainians remain neutral as for the growth of the country’s economy in the coming year – this index rose by 0.5 points, to 62.5.
The index of current personal financial standing rose by 1.4 points, to 60.3, although Ukrainians were neutral in relation to this indicator – the figure grew by 0.8 points, to 50.9.
Consumer confidence index in Ukraine is growing for the fifth consecutive quarter: in Q4 2017 it reached 61 points, which is 3 points more than in Q3 2017 and 9 points more than in Q4 2016, according to the Nielsen global consumer confidence report. “Consumer behaviors are evolving. However, we see how demanding they are in selection of goods, services and brands,” Managing Director of Nielsen in Ukraine and Belarus Vaios Dimoragas said.
According to him, having a limited budget, consumers want impressions and positive emotions from shopping, the Internet helps them make the right choice before buying.
The index is calculated by three indicators: the consumers’ assessment of the prospects for the labor market in the next 12 months, the level of financial wellbeing in the next 12 months, the willingness to spend money at the moment.
The increase in the consumer confidence index in the fourth quarter of 2017 compared to the third quarter of the same year is due to the improvement in the indicators for all three indicators.
According to the document, the absolute majority of Ukrainians continues to believe that the country is in a state of crisis, while the number of those has increased slightly: 93% – in the fourth quarter 2017 against 92% – in the third quarter 2017.
The number of consumers, who believe that the country will not get out of the crisis in the next 12 months, fell to 66% at the end of 2017 with a 74% quarter before.
On the first and second places in the list of concerns of Ukrainians are still feelings about the growth of utilities tariffs and war: 29% and 28% of consumers are worried about this, respectively. The top five reasons for experiencing also include rising prices for food, economy and health, according to the study.
According to it, 26% of Ukrainian consumers do not have free funds after buying essential goods. Those, with whom they stay, spend free money on new clothes (37%), make savings (29%), have fun outside the house (26%).
The value of the index above 100 points indicates the prevalence of optimists in the country, pessimists are below 100 points, and the value of 100 points is about the balance between optimistic and pessimistic expectations from the future.