KASI consumer-sentiment index remained stable at -27 as a one-point increase in the index of consumer future expectations was offset by a one-point fall in the index of current conditions.
In general, consumers are expecting the general conditions both in their country and city to improve as both indexes edged up by 6 and 3 points respectively.
While Kenyans are showing optimism in their expectations to meet regular expenses, worrying job prospects indicate that perhaps making large purchases will be unlikely in the coming 6 months.
ICS Kenya data for 2020
Source: https://www.app.kasiinsight.com/
In the month of June, KASI CCI remained stable at -27 which was the value recorded last month. While stable, consumer confidence remains at the negative end of the spectrum as life continues to revolve around the COVID-19 pandemic. The index of consumer expectations rose by 1 point from -18 to -17; however, the pessimism surrounding current conditions led to a one-point drop in the index of current conditions from -50 to -51.
KASI consumer-sentiment index remained stable at -27 as a one-point increase in the index of consumer future expectations was offset by a one-point fall in the index of current conditions.
While levels seen in all the indexes remain negative, Kenyans are beginning to show more optimism about future prospects of the country despite the current challenges. Currently, Kenya continues to see an increase in the number of positive cases on a daily basis. At the end of June, the country recorded a startling 6,366 cases, a significant increase from the 2,021 positive cases recorded on June 1st. The number of cases more than doubled in July reaching 13,353 cases.
While the number of positive cases is rising, the number of recoveries is also on the rise which is good news. On June 7th the health ministry recorded 706 recoveries which went up to 1,328 by mid-June. As the pandemic becomes a health crisis in the consumer mind, we may see a negative impact on consumer confidence in the months ahead.
When it comes to measures to contain the virus, president Kenyatta announced a further 30-day extension on the curfew that ensures everyone is indoors between 9 pm – 4 am. The impact of the curfew will be felt primarily by the services/restaurant industry. Lastly, in the month of June, the European Union granted Kenya 275 million shillings (2.7 million USD) to aid the government in its fight against the Covid-19 virus.
While Kenyans are showing optimism in their expectations to meet regular expenses, worrying job prospects is indicating that perhaps making large purchases will be unlikely in the coming 6 months
While Kenyans are showing optimism about future conditions in the country, the index only improved by a single point. Confidence increased enough so that Kenyans feel they will be able to meet their regular expenses but not enough so that discretionary spending will be likely in the near future. Hence, the demand for items such as furniture, electronics, and other large purchases is expected to stay low.
The current political and social conditions have dampened consumer expectations. The news surrounding police brutality cases as well as the recent disappearance of $2 million worth of personal protective equipment donated by the Chinese government are not instilling public confidence, especially when job uncertainty remains a key concern for people.
Since the pandemic hit Kenya, there have been massive job losses so it's not surprising that our job prospects sub-index has seen the steepest decline. The head of the public health ministry expressed concern over the fact that many of those who have recovered from the virus are currently facing a great amount of stigma. Sadly the virus turned into another reason to discriminate against people.
Consumer-facing companies should expect to face lower demand for non-necessity products as consumers stay away from public places and avoid making large purchases.
Respondents indicate that the current economic environment is not ideal to make large purchases and that spending on large purchases is expected to fall in the coming 6 months. This means that demand for products such as furniture, electronics, automobiles will remain low. Tourism has also taken a significant hit as 72% of respondents surveyed in KASI COVID Pulse, indicate that they have canceled travel plans in the month of June. Finally, demand for recreational activities has gone down significantly as well as 83% of consumers indicate that they avoid dining at fast-food restaurants and 91% are avoiding public outings such as going to the movies, malls, and restaurants.
By Tanya Gandhi, Economic Intelligence Group at KASI.
#coronavirusafrica#coronavirusblackpeople#covid19#Kenya#Cameroon#Nigeria#Ghana#IvoryCoast#Tanzania#SouthAfrica
About the methodology
KASI Consumer Confidence Score (KASI CCI) is a composite index compiled from a seven-question survey that runs monthly via our consumer polls in the countries covered. The data output is based on a fresh, randomly selected representative sample of city dwellers aged 18-64. Released the first week of every month, KASI CCI provides a focused view on consumer perceptions in seven African urban centers (Ghana, Nigeria, Kenya, South Africa, Cameroon, Ivory Coast, Tanzania) where most spending in the continent is concentrated.
For each question, the final metric will be a ‘balance measure’ of the percentage of positive responses minus the percentage of negative responses. The overall metric will be an average across all the questions.
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