CONSUMER SPENDIG TO PICKUP IN 6 MONTHS

With people planing to buy big ticket items like durables, vehicles and house, the consumer spending is likely to recover in the next six months, according to a study. According to ZyFin Research, a financial research and analytics company, it's consumer outlook index was at 44.2 in July, from 44.3 in the previous month. Score above 50 reflects optimism while below 50 indicates pessimism. "Nevertheless, it is a vast improvement from the corresponding month of the previous year (40.8, July 2013), as has been the case since the electoral verdict in May 2014," Zyfin said. The consumer outlook index is a barometer for consumer confidence, reflecting current and future spending plans, employment and inflation outlook of urban Indian consumers. "The index values suggest a distinct upward shift in consumers' willingness to spend since the run up to the NDA's win at the general elections and subsequent government formation. "Current data reflects higher spending plans on durables and homes. Vehicle purchase sentiment is also on the mend. This should culminate into better sales volumes within the consumer sector in the upcoming festive period, a much-awaited deviation from weak sales trends observed over the past two festive seasons," Zyfin said. The index is based on a monthly survey of 4,000 consumers across 18 cities. The top cities with the highest scores this month were Hyderabad, Mangalore, Mumbai and Guwahati. The spending sentiment index increased to 33.4 in July 2014 from 30.4 in the previous month. The third consecutive increase brings the index to its highest level since November 2012. "A larger number of consumers surveyed mentioned that they have plans to purchase homes and durables, as compared to previous months. Plans to spend on two- and four-wheelers have also seen a slight uptick. These improvements point to a recovery in consumer demand over the next six months," it said. The inflation sentiment index proved to be the dampener, dropping by close to three points, to 25.5, from 28.2 in June 2014. The employment sentiment index maintained its optimistic streak (score above 50) throughout 2014. It registered a score of 52.5 in July 2014 compared to 53.9 in the previous month.