MNI Russia Consumer Sentiment Indicator: Russia Consumer Sentiment Ticks Up In July- Business Conditions For Big Ticket Purchases Fuel Sentiment

Consumer sentiment in Russia improved further in July, moving back to levels seen before the series low recorded in May.
 
The MNI Russia Consumer Sentiment Indicator increased 5.4% to 71.3 in July from 67.6 in June. Sentiment is now 0.7% higher than the same month a year ago and up 3% since the start of the year. Although still close to record lows, the latest result marks an encouraging start to Q3 after confidence fell to a series low of 68.8 in Q2, largely due to May’s disappointing outturn.
 
All five components of the headline indicator increased between June and July, led by a sizeable increase in both expected business conditions and buying conditions for big ticket items. Business Conditions in One Year rose 10.8% on the month to 62.3 and Durable Buying Conditions rose 7% to 76.4 in July. Both indicators now sit at their highest level since April.
 
Consumers’ expectations for business conditions in five years also contributed positively, rising to the highest since June 2015. Respondents were also more upbeat about the current business environment, with the Current Business Conditions Indicator increasing 5.4% to a 20-month high of 70.9 in July. The proportion of consumers who felt that, compared with a year ago, business conditions were poor or very poor fell to 54.2% in July, the lowest outturn since December 2014 before the onset of the economic decline.
 
Consumers’ assessments about their current and expected financial situation over the next 12 -months also improved, with the Expected Personal Finances Indicator rising to the highest levels since June 2015.
 
In line with this, consumers were less downbeat about hiring expectations. The Employment Outlook Indicator rose to 69.9 in July, the highest outturn recorded since June 2015.
 
Respondents were also less pessimistic about the car market. The Car Purchase Expectations Indicator rose 5.4% to 86.6 in July. In spite of July’s improvement, the indicator remained well below the 100 breakeven level as most Russian consumers felt it was not a good time to buy a car.