CSI for March 11
< SUMMARY >
□ T he Composite Consumer sentiment Index (CCSI) for March 2011 was 98, falling for the fourth straight month and dropping below the benchmark of 100, for the first time it had since the 105 recorded for May 2009.
― Consumer sentiment on living standards dropped by 7 point (89→82) compared to February and that concerning the outlook for living standards similarly declined by 9 points (96→87).
― Consumer sentiment regarding current domestic
economic conditions fell by 18 points (82→64), and that on their future outlook by 19 points (94→75).
― Consumer sentiment on prospective changes in total
household income (100→95) and on prospective spending decisions (112→109) fell by 5 points and 3 points,
respectively.
□ Consumer sentiment concerning the outlook for price movements rose by 5 points from the previous month (148→153), and that regarding expected inflation by 0.2%
points (3.7%→3.9%).
※ 2,200 households in 56 cities nationwide surveyed from March 14 to 21, 2011, among which 2,091 responded.
2010 2011 (B-A) Jun Jul Aug Sep Oct Nov Dec Jan Feb(A) Mar(B)
CCSI 112 112 110 109 108 110 109 108 105 98 ( △ 7 )
Current Living
standards1) 96 95 95 91 91 93 93 90 89 82 ( △ 7 )
Domestic economic
conditions1) 104 107 104 98 92 97 95 88 82 64 (△18) Prospective
Living
standards2) 105 105 101 101 99 102 101 98 96 87 ( △ 9 ) Domestic
economic
conditions2) 112 115 109 108 104 108 105 97 94 75 (△19) Changes in
total household income2)
103 102 101 102 101 102 102 103 100 95 ( △ 5 )
Spending
decisions2) 112 112 112 112 112 113 112 114 112 109 ( △ 3 ) Price
movements2) 138 141 146 144 141 141 140 153 148 153 ( + 5 ) Expected
inflation3) 3.0 3.1 3.2 3.2 3.4 3.2 3.3 3.7 3.7 3.9 (+0.2)
Trends of Major CSI Components
Notes : 1) Current situation in comparison with six months earlier.
2) Outlook for six months ahead in comparison with the current situation.
3) Outlook for the following year in comparison with the current situation (%, %p).
※ Further statistics may be found at the Bank of Korea's Economic Statistics System website (http://ecos.bok.or.kr/).
<Supplement>
How the Consumer Survey is conducted
1. Objective of survey
― The Consumer Survey is carried out for use in analysis and forecasting of consumer spending by processing the information collected through suveying consumer sentiment and perception of the economic situation.
2. Items subject to survey
― Consumer sentiment as measured by:
o current living standards in comparison with six months earlier; and o living standards, household income and spending decisions for six
months ahead in comparison with the current situation.
― Perception of the economic situation, in terms of:
o current domestic economic conditions in comparison with six months earlier;
o domestic economic conditions and employment opportunities for six months ahead in comparison with the current situation; and
o price and interest rate levels for six months ahead (as well as the outlook for expected inflation for the following year) in comparison with the current situation.
― Outlook for asset values expressed as:
o household savings and debt in comparison with six months earlier, and for six months ahead in comparison with the current situation; and o asset values for six months ahead in comparison with the current
situation.
3. Method of Survey
― After the survey form is sent out to the target households, the completed survey forms are received by mail. For households failing to respond, surveys are conducted via phone interviews.
Select component indexes
→
Normalize individual CSIs
→
Compute the Composite Consumer
Sentiment Index (Current)
- living standards - domestic economic
conditions (Outlook)
- living standards - change in total
household income - spending decisions - domestic economic
conditions
By using the mean and standard deviation of each individual CSIs.
By multiplying the median of the standard deviations of the six individual CSIs,
by the result of summing up and normalizing the six individual CSIs.
Overview of the Composite Consumer Sentiment Index
□
What it is―
The Composite Consumer Sentiment Index is composed of six major CSIs, including current living standards, prospective changes in total household income and prospective spending decisions, all of which are normalized. The composite index is used to gauge overall consumer sentiment.o The composite index is a comprehensive indicator of consumer sentiment, composed of six individual CSIs normalized by using the means and standard deviations of the respective indexes during normalization interval (Q1 1999 ~ Q2 2008).
― A reading above 100 for any individual CSI signifies that the households that answered positively outnumbers those that answered negatively, with the reverse being true in the event that it is below 100.
A CCSI of above 100 represents that consumers’ subjective expectations as to the economic situation are more positive than the past (Q1 1999 ~ Q2 2008) average, and one below 100 that they are more negative.
□ Method of compilation
□
Usefulness of the CCSI① Allows overall judgment of consumer sentiment by a sole representative index compiled by normalizing individual CSIs, each of which has different characteristics; and
② Useful for forecasting future consumption, economic activity, etc., since it shows high correlation with private consumption and the coincident economic index.
Formula for normalizing individual index
～
□ Individual index normalized:
․
t: relevant month
․
* t: normalization interval (Q1 1999~Q2 2008)
․
* t: normalization interval (Q1 1999~Q2 2008)
Formula for Composite Consumer Sentiment Index
～
□
×
* CCSI: Composite Consumer Sentiment Index
․
t : relevant month
․
* t: normalization interval (Q1 1999~Q2 2008)
․
* t: normalization interval (Q1 1999~Q2 2008)
․
sm: median of the standard deviation of the six individual CSIs during the normalization interval; sm is 9 for the current standardization period.
