The Consumer Confidence Index expresses the "propensity to consume" in the following month, as a percentage score given by respondents on HILL's independent survey panel. Respondents are asked to rate their propensity to consume (i.e. their desire to buy products or use services) in the following month, taking 100 as the maximum propensity to consume. We have conducted these surveys every month since April 1993.

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Propensity to consume
for December 2003
56.2 points

This month's consumer confidence index weighed in at 56.2 points, a jump of 3.6 points from last month's 52.6.

The index, which has been on the rise since September, took a particularly dramatic 3.6-point leap this month. It now stands at 100.5% of its level a year ago in the best showing for December since 2001. Plus this is the first time in 36 months that consumer confidence has surged above the 56-point mark.

The index for men climbed 4.4 points from 47.7 last month to 52.1 this month, while that for women climbed 2.9 points from 57.5 to 60.4. Note the marked rise at year's end among men despite their general tendency to show less dramatic gains than women.

The survey of lifestyle priorities conducted at the same time clearly reveals the factors driving the rise in consumer confidence. Especially noteworthy is the leap in the "Medium-sized purchases" category, the figure for which climbed from 15.7% in November to 27.0% in December. That's the highest level since the survey of lifestyle priorities was launched in May 2000. With the year-end shopping season in full swing, sales of the latest Big Three consumer items (ultra-slim TVs, DVD recorders and digital cameras) are booming. The appearance of alluring products like these on the scene is loosening purse strings among men and women alike.

Propensity to consume
for November 2003
52.6 points

This months consumer confidence index stood at 52.6 points, climbing 1.7 points from last month's 50.9.

The index has now risen for two straight months and appears to be establishing an upward trend heading toward the end of the year. These gains have been underpinned by a strong recovery in spending by women.

In fact, the November consumer confidence index for just women gained 2.6 points on-month. This means that there was a very healthy rise of 4.8 points for the three months of October-November.

The survey of "lifestyle priorities" conducted at the same time showed that the recovery in consumer confidence among women was supported by big gains in such areas as "recreation and leisure" and "personal relationships". These results suggest that consumer demand toward the end of the year can be cultivated in such areas as family vacations and social gatherings.

Propensity to consume
for October 2003
50.9 points

This month's consumer confidence index stood at 50.9 points, up 1.0 from last month's 49.9.

This year the index took a deeper dive than usual from August to September, and there were worries about what lurked around the corner, but in the end things took a turn for the better. Consumer confidence normally rises between October and December, and maybe this is a sign of the same pattern unfolding again. Nonetheless, the figure is still low in absolute terms, languishing at 95.3% of its level a year ago.

As for the individual sexes, men slipped 0.1 point from last month's 47.1 to 47.0, while women surged 2.2 points from 52.7 to 54.9. So while the index for women slumped noticeably last month, it was swift to recover. And that recovery is what drove October's rise. In the survey of "lifestyle priorities" conducted at the same time, "Daily (minor) purchases," "Life with your family" and "Housework and household affairs" all showed gains, reflecting a growing desire among housewives to channel more money into daily consumption. Although the cool summer weather may have dampened things for a while, the Japanese female's urge to spend remains fundamentally solid.

Propensity to consume
for September 2003
49.9 points

This month's consumer confidence index registered 49.9 points, down 2.7 from last month's 52.6.

Consumer confidence tends to slip from August to September anyway, but this year's drop was especially severe, undercutting last September's performance by a hefty 3.4 points.

What's more, for the first time in six months the index dipped below the 50-point line, which it had managed to stay above since March. The dramatic decline can be attributed in part to the impact of this year's unusually cool summer weather finally rearing its head.

As for the individual sexes, men scored 47.1 points, a drop of 2 points from last month's 49.1, while women plummeted from 56.1 last month to 52.7 this month, an eye-popping decline of 3.4 points. The figure for women has fallen below the 53-point mark only three times in the past (in August 2000 and September 2001, February 2003), so among them the slump really is quite serious. The cool summer, it seems, has had a particularly heavy impact on consumer confidence among women, who tend to be less buoyed than men by good news from the stock market anyway.

Propensity to consume
for August 2003
52.6 points

This month's consumer confidence index registered 52.6 points, down 0.3 points from last month's 52.9.

That's only a slight decline, and the index is still up 0.4 points over last August's 52.2. Last month was the worst July on record, and that, in combination with the fact that consumer confidence tends to dip in August and beyond into the fall anyway, sparked concerns that things might deteriorate further. But in the end the Japanese consumer managed to hang in there.

The index for men rose from 48.7 last month to 49.1 this month, while among women it slipped from 57.1 to 56.1. Thus the males put in a good show despite the marked decline among females. Consumer confidence among men is highly sensitive to macroeconomic trends, so perhaps the recent appreciation in share prices has put the wind in their sails. Note too that the figure for men has steadily been on the rise since April.

The survey of "lifestyle priorities" conducted simultaneously revealed even greater enthusiasm than usual for summer recreation, with the score for "hobbies and pastimes" standing at 66.1 compared to last August's 63.2 and that for "recreation and leisure" standing at 68.4 compared to last August's 65.2. Given the unseasonably cool July weather (the survey was conducted in late July), people are evidently raring to enjoy the height of summer to the full.

Propensity to consume
for July 2003
52.9 points

This month's consumer confidence index weighed in at 52.9 points, a gain of 1.7 points over last month's score of 51.2.

While the index was up over June, it's still the lowest figure on record for July, when consumer confidence typically takes a big leap. (The number is down 0.7 points compared to last July's 53.6.)

Expectations were high that July would put in a good show, since the score for June, which outdid that for a year before, suggested things were on the mend. But as it turned out the results were a bit disappointing. The index appears to be languishing among men in particular, inching up only slightly from 47.5 last month to 48.7 this month; among women it climbed from 54.9 to 57.1. Consumer confidence has slowly been recovering, but as summer arrives it seems to be stalling for lack of any really big good news. It will be interesting to see how much impact rising share prices will have on the index.

In the survey of "lifestyle priorities," which is conducted simultaneously, three items scored higher than they did last July: "personal relationships" (54.0 -> 57.0), "housework and household affairs" (58.3 -> 59.9), and "daily (minor) purchases" (27.3 -> 28.8). Consumers, it seems, are still as eager as ever to spend money on everyday items, social life and things for the interior.

Propensity to consume
for June 2003
51.2 points

This month's consumer confidence index registered 51.2 points, down 0.6 from last month's 51.8.

After hitting a low of 47.8 in February, the index has stabilized around the 50-point level since March. This month's figure is up slightly over last June's 50.8, representing 100.8% of that number to be exact. So the decline in consumer confidence, it seems, has bottomed out and the worst is over.

Still, a score of 51.2 is a long way from the 60-point level the index reached in 1994-96, and it hardly deserves the description of a full-blown recovery. Consumer confidence may be about to take an upward swing, but we'll just have to wait and see. In July the index usually takes a big leap, and how high it rises should give an excellent clue as to whether consumer spending is really on the mend or not.

The index for men, which has tended to fluctuate considerably, remained virtually unchanged at 47.5 as compared to May's 47.7. But that for women dropped 1.1 points from 56.0 to 54.9, which is a bit worrisome.

What factors are likely to fuel a consumer recovery? Some hints can be gleaned from the question about "lifestyle priorities" asked as part of the survey. Two lifestyle priorities recorded major gains over last month: "study," which rose from 58.9 in May to 62.9 in June, and "health," which rose from 87.9 to 90.6. On the other hand, "hobbies and pastimes" (63.2 -> 55.3) and "recreation and leisure" (57.3 -> 49.1) were both down considerably. As worries like SARS put travel plans on hold, people are, it seems, devoting more of their energies to pursuing personal improvement by studying and staying fit.

Propensity to consume
for May 2003
51.8 points

This month's consumer confidence index weighed in at 51.8 points, a jump of 1.0 point over last month's 50.8.

Though the lowest score for May on record, at least it's higher than last month. The index for men in particular showed definite signs of improvement with a climb to 47.7, up 1.9 points over April's 45.8. So we seem to be out of the danger zone (below 45.0), especially compared to the all-time low of 43.2 set in February. This mood of optimism may be a harbinger of things to come.

The reason for the surge in the index among males is suggested by their responses to the question about "lifestyle priorities" — what aspects of life respondents intend to focus on most — asked as part of the survey. Men are growing more eager to spend time with family — specifically, on "Life with your famil," "hobbies and pastimes" and "housework and household affairs." With the summer recreational season just around the corner, the key to Japan's economic recovery could well lie in male-initiated household consumption.

Propensity to consume
for April 2003
50.8 points

The consumer confidence index for this month registered 50.8 points, down 0.6 points from last month's 51.4.

Though the difference from last month is small, that's still the worst April on record. As far as the individual sexes go, the figure for women remained unchanged from March at 56.0, while that for men dropped 1.1 point from 46.9 to 45.8. So women continue to display their resilience.

One concern this month was how much impact the Iraq war would have on consumer confidence. But examine the numbers for February through April and there appears to be no adverse effect from the war. If anything, the index recovered stability in March and April after its dramatic December-to-February decline. Which leads one to conclude that consumer confidence isn't necessarily going to plummet just because war breaks out. You could even argue that the unease that precedes a conflict has a greater psychological impact than the commencement of hostilities itself.

But that doesn't alter the fact that consumer confidence remains stuck in the doldrums compared to a typical year. Low but level might be the best description.

Propensity to consume
for March 2003
51.4 points

Consumer confidence for March 2003 stood at 51.4 points.

The consumer confidence index for this month weighed in at 51.4 points, a climb of 3.6 points over last month's 47.8.

The index rose almost four points from last month's all-time low to emerge above the 50-point line. It usually jumps between February and March anyway, but the gain was especially dramatic this year. The macroenvironment is looking increasingly bleak what with the Iraq crisis and the slump on the stock market, but consumer confidence may just have bottomed out.

Let's probe the results a bit further by breaking them down by age group.
Teens-20s 46.9 last month -> 57.3 this month (10.4 points up)
30s-40s 44.3 last month -> 49.0 this month (4.7 points up)
50s-70s 52.3 last month -> 51.2 this month (1.1 point down)
Clearly, young people were the driving force behind the recovery in consumer confidence.

Another question asked as part of the survey relates to "lifestyle priorities": What areas of life did you invest time, effort or money in? "Recreation and leisure," "occasional purchases" and "major (expensive) purchases" all showed a noticeable jump over last month, demonstrating that people are starting to spend more on leisure activities and durable goods. March is usually the season when Japanese students head overseas to travel, but this year a common response to the question about specific leisure activities people were planning was visiting the spa with the husband or wife to take a break from it all. Fiscal-year-end demand is particularly strong this year. Among the factors at work here: a backlash against last month, when things hit rock bottom, and the desire to buy pricey items like cars when bargains are to be had as companies close their books.

Propensity to consume
for February 2003
47.8 points

This month's consumer confidence index plunged to 47.8, a 4.7-point drop from last month's 52.5 and the lowest level since we started our survey. Consumer confidence typically dips in February anyway, but the decline this year was particularly severe. That's the result of a combination of macro trends, in the form of the seemingly endless slump in the Japanese economy and the ever more tense Iraq situation, and seasonal factors.

Even consumer confidence among women, which in January remained strong, took a serious turn for the worse, plummeting from 58.2 to 52.6. Still, at least it kept its head above the 50-point mark.

Meanwhile men set an all-time low at 43.2 points. Now that is cause for concern, especially considering that they're now below the 45-point line.

Propensity to consume
for January 2003
52.5 points

This month's consumer confidence index hit an all-time low for January with a score of 52.5 (down 3.4 points from last month's 55.9). The poor showing no doubt reflects the creeping pessimism that the New Year has done nothing to dispel. After all, the day of reckoning is approaching for Japan's deteriorating financial sector, while on the international stage the Iraq crisis and the explosive situation on the Korean peninsula are both moving inexorably toward their denouement.

Men scored particularly low, dipping below the 50-point threshold with a figure of 47.1 (in contrast to last January's 50.7). That result reinforces what we've argued in the past about men being easily swayed by macroeconomic factors. The newspapers ushered in 2003 with an unprecedented barrage of jeremiads deploring the country's plight, and the Japanese male so identifies with Japan as a whole that it's little wonder he's in no mood to hit the shops.

Women on the other hand scored 58.2, up some three points over last January's 55.3. That's back to the same level as in 1997-99. As we've pointed out so many times before, women are the driving force behind consumer confidence, and the gulf between the two sexes has never been greater.

To illustrate the contrast, we've appended a graph comparing the index for men and women between January 1999 and January 2003. We've also plotted stock prices (in the form of the Nikkei average) as a yardstick of macroeconomic trends. As you can see, male consumer confidence has moved in sync with falling stock prices since at least 2001.

Women have never fallen below the 50-point mark, but men have on several occasions: in September-November 2001, after 9-11, and again in February-March 2002, with the so-called March crisis looming as Japan's crippled banks closed their books. This leads one to conclude that, when it comes to consumer confidence, men are at the mercy of macroeconomic developments, especially if the news is bad.

Maybe consumer confidence among men would perk up a bit if they'd start reading the paper from the TV listings instead of the front page. Only when the Japanese male stops identifying totally with country and company and starts acting like a well-rounded individual again can Japanese society as a whole resume healthy levels of spending. And, with NPOs making waves like never before, 2003 could well be the year big changes happen.

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