Consumers Unlikely To Buy Expensive Items In Next 12 Months — CBN

Most consumers in Nigeria would unlikely buy big-ticket items in the next 12 months, a survey by the Central Bank of Nigeria has revealed.

These items are high-priced goods, such as a house, cars or products with selling prices and profit margins that are significantly high depending on the level of income of the buyer.

The Consumer Expectations Survey (CES) report for the last quarter of 2020, recently released by the Statistics Department of the apex bank was conducted during the period of November 16 -25, 2020, covering a sample size of 2,070 households drawn from 207 Enumeration Areas (EAs) across the country, with a response rate of 99.8 percent.

According to the report, the overall buying conditions index for big-ticket items in the current quarter stood at 21.6 points.

“This indicates that majority of consumers believed that the current quarter was not the ideal time to purchase big-ticket items like consumer durables, motor vehicles and houses & lots.

“The buying intention indices for consumer durables, motor vehicles and house & lot were below 50 points, which shows that respondents have no plans to make these purchases in the next twelve months”.

The consumers’ overall confidence outlook was pessimistic in the reviewed quarter, standing at -14.8 index points.

“Respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income.

“The consumers were however optimistic in their outlook for the next quarter and next 12 months with indices of 10.5 and 28.9 points, respectively”.

This positive outlook was attributed to the expected increase in net household income, an anticipated improvement in

Nigeria’s economic conditions and expectations to save a bit and/or have plenty of savings in the next quarter and the next 12 months.

Also, most of the respondents expect prices of goods and services to rise in the next 12 months, with an index of 43.1 points.

“The major drivers are savings, food & other household needs, education, purchase of appliances/durables, purchase of car/motor vehicle, and purchase of houses.

On borrowing and exchange rates, consumers expect the borrowing rate to rise and anticipate the naira to appreciate in the next 12 months, with indices of 12.2 and 3.9 points, respectively.

The unemployment index for the next 12 months remained positive at 36.9 points in the reviewed quarter, indicating that consumers generally expect the unemployment rate to rise in the next one year.