English Top > Lifestyle Conditions > 2005
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.
- Propensity to consume
for December 2005
57.6 points -
The Consumer Confidence Index rose a hefty 6.2 points to 57.6 points in December, marking the highest level since January 2001. The desire to spend leveled off between August and November of this year, but recovered strongly in December. This also marked a 0.6-point increase over December of last year. As the economic recovery gains steam, more and more corporations are reporting good results and winter bonuses are at record high levels. It would appear that these upbeat economic factors are starting to have a positive impact on household budgets. We will need to monitor whether or not this bullish consumer confidence trend can be sustained into next year.
The Consumer Confidence Index rose sharply for both men and women in December. The propensity to spend among men climbed 7.5 points to 54.0, while the score for women jumped 5.1 points to 61.4. The Consumer Confidence Index for men since June has been somewhat sluggish, indicating a more cautious stance toward spending. However, the score for men this month surged to the highest level in four years as men enjoy the effects of the improving economy and bigger Christmas bonuses. Compared to the same month last year the score for men was up 2.4 points, while the score for women fell 1 point. So clearly there has been a big improvement in consumer confidence among men.
A simultaneous survey of lifestyle priorities showed that the desire to spend on "major (expensive) purchases" and "medium-sized purchases" among men were both at their highest levels for this year, while the desire to spend on "major (expensive) purchases" by women was also at its highest level for the year. These figures bode well for the year-end sales campaigns already underway.
- Propensity to consume
for November 2005
51.4 points -
The Consumer Confidence Index for November increased 0.3 points to 51.4 points, halting three consecutive months of decline. This marked a 0.4 point decrease compared to November last year and a continuation of last month's on-year decrease. While a recovery was expected since a typical year sees consumer confidence peak in November and December, the slight rise in the index in November was a somewhat sluggish result. While macro indicators show a trend toward a more robust economy, this is not significantly reflected in consumer confidence. It will be interesting to see how consumer confidence trends develop in December when sales competition over bonus income is fully underway.
The November Consumer Confidence Index for men fell 0.7 points to 46.5 and rose 1.3 points for women to 56.3. This is the lowest record for men this year and opens a 9.8 point gap between women. Compared to the same month last year this is a 1.6 point drop for men and a 0.8 point rise for women. The drop in confidence for men is noteworthy.
A simultaneous survey of lifestyle priorities showed that purchasing trends showed the second highest level for the year among women for "Major (expensive) purchases". In contrast, purchasing trends for men moved lower over last month to the second lowest level of the year, suggesting that men are taking a cautious stance toward consuming.
- Propensity to consume
for October 2005
51.1 points -
The Consumer Confidence Index for October slipped 0.8 point from September to 51.1 points, marking the third straight month of declines. This marked a 1.8-point drop compared to October of last year, which is somewhat disappointing as September saw the first on-year increase in four months. The government?s monthly economic report stated that ?the economy is gradually recovering?, but consumer confidence still remained sluggish in October. During a typical year the propensity to spend tends to peak in November and December. It will be very interesting to see how the consumer confidence trend develops toward the end of this year.
As was seen in September, the propensities to spend for both men and women were lower in October as compared to the previous month. The score for men fell 1 point to 47.2 and the drop for women was 0.7 point to 55.0 points. Compared to the same month last year this was a 1.5-point drop for men and a 2.1-point retreat for women, which are rather large pullbacks. This is only the second time this year that the score for women was lower compared to the same month last year.
A simultaneous survey of lifestyle priorities showed that purchasing trends for both men and women showed no major deviations from the established averages. There are expectations that that special sales campaigns around the time employees receive their year-end bonuses will help raise the propensity to spend toward the end of this year.
- Propensity to consume
for September 2005
51.9 points -
The Consumer Confidence Index for September retreated 0.7 point from August to 51.9 points. During a typical year the propensity to spend tends to fall in September. However, this figure is still a 0.6 point increase compared to September of last year, marking the first on-year rise in four months. Recently the Bank of Japan said that the economy is breaking out of its lull, corporate earnings have been strong and incomes are rising. This has all contributed to a mild recovery in personal consumption. There are some worries such as higher oil prices, but consumer confidence tends to increase toward December and so there is reason for optimism.
The propensity to spend in September fell compared to August for both men and women. The drop for men was 0.6 point to 48.2, while the score for women slipped 0.7 point to 55.7 points. It can be assume that some seasonal factors were involved. Compared to September of last year, this marked a 1.2-point increase for men and a 0.1-point gain for women. This was the first time in four months that the score for men was higher on-year. There have been many reports on the improving macroeconomic situation such as bullish economic assessments, strong first half corporate results, rising stock prices and an improved employment situation. It can be said that these reports are having a positive impact on the desire to spend among men.
A simultaneous survey of lifestyle priorities showed a big drop in the desire to spend on "Recreation & leisure", while both men and women expressed the desire to spend more on purchases related to "work" and "study". In terms of purchasing trends, the scores for women remained in line with averages, but men showed a big improvement in the propensity to spend on "major (expensive) purchases".
- Propensity to consume
for August 2005
52.6 points -
The Consumer Confidence Index for August slipped 1.6 points from July to 52.6 points. During a typical year the propensity to spend tends to fall off in August and so the setback this month can largely be attributed to seasonal factors. This was a mere 0.3-point drop compared to August of last year, but this still marked the third straight month in which the score was lower as compared to the same month during the previous year. This trend could be the cause of some worry, but a growing number of studies at such sites as department stores, home electronics stores, travel agencies and others suggest that personal consumption patterns remain promising. Therefore, trends in this survey from September will need to be carefully examined.
A more detailed study of the propensity to spend showed a 0.1-point increase on-month for men in August to 48.8 points, but a 3.3-point drop for women to 56.4 points. Compared to August of 2004 this represented a 2-pont drop for men and a 1.4-point gain for women. For three straight months now the score for men has fallen as compared to the same months last year. The desire to spend among men has slowed recently and this is why the overall scores have been lower on-year. The scores for women have fluctuated more on a month-to-month basis, but the overall trend has been quite solid when compared to the previous year.
According to the simultaneous survey of lifestyle priorities, there were increases in the number of both men and women that wanted to spend more on "hobbies & pastimes" and "recreation and leisure" in August as this is the summer holiday season. Scores for almost all buying behavior categories rose close to their highest levels for the year in July. However, in August this buying behavior was cooled a bit as consumers wanted to have some money on hand for those purchases that had to be made and for leisure activities. So there was a falloff in the propensity to spend for both men and women on everything from "daily (minor) purchases" to "major (expensive) purchases". These drop-offs were particularly strong among women.
- Propensity to consume
for July 2005
54.2 points -
The Consumer Confidence Index for July rose 3.4 points from June to 54.2 points, bouncing back from the big drop in June to reach its highest level this year. While the monthly figures will tend to rise and fall, the overall trend shows that consumer confidence continues to be quite solid. As the larger economy recovers, better corporate earnings are starting to gradually lead to healthier household budgets.
A simultaneous survey of lifestyle priorities was conducted to better understand the strong figures from July. This survey showed that the poor buying behavior seen in June improved strongly for all categories from "major (expensive) purchases" to "daily (minor) purchases". In fact, each of these scores almost touched their highs for the year.
A further breakdown of the propensity to spend showed a 0.4-point increase for men in July to 48.7 and a huge 6.3-point gain for women to 59.7 points. In fact, the score for women rose to its highest level this year. However, compared to the same month last year this represented a 0.8-point drop for men and only a 0.1-point gain for women. This suggests that the desire to spend among men is stagnating a bit.
There was a big overall improvement in purchasing patterns, especially among women. Compared to June, the propensity to spend among women rose 8.5 points for "daily (minor) purchases", 10.5 points for "medium-sized purchases" and 3.9% for "major (expensive) purchases". These big gains were likely due to record high summer bonuses paid out this year. It can be said that this stronger desire to make purchases pulled up the propensity to spend among women and helped to lift the overall Consumer Confidence Index for July.
- Propensity to consume
for June 2005
50.8 points -
The Consumer Confidence Index for June fell 3 points from May to 50.8 points. This matched the June 2002 score, which was the worst score on record for any June. During a typical year the propensity to spend tends to soften in June, but the size of the drop this year was surprisingly large. Moreover, this represented a 2-point drop from the same month last year and represents a short rest after six straight months of improved consumer sentiment.
A simultaneous survey of lifestyle priorities showed on-month drops in the desire to spend on everything from "Recreation and leisure" and other large purchases to even very minor purchases. This can likely be attributed to a natural fallback after the big gains seen last month. There have been several positive developments in terms of consumer trends. For example, the Cabinet Office reported that there were "signs of improvement" in May's consumer confidence and record summer bonus are expected to be paid this year. It will be important to closely monitor the Consumer Confidence Index for July, which tends to rise during a typical year.
A further breakdown of the propensity to spend showed that there was a 0.8% drop among men to 48.3 points and a big 5.1-point drop among women to 53.4 points, as compared to the previous month. In particular, the score for women was the worst for any June on record. Compared to June of last year this marked a 1.6-point decline for men and a 2.3-point pullback for women. This was the first time this year that scores were below those for the same month last year for both men and women.
The survey of lifestyle priorities showed a big on-month drop in the desire to spend on "Recreation and leisure" for both men and women. This is probably due to the fact that consumers spent a lot on this sector during the long Golden Week holiday in May and now want to set aside some money for the summer vacation season. There was a big drop in the intentions to make purchase, especially among women. Compared to May, the propensity to spend on "Daily (minor) purchases" fell 8.5% and the desire to spend on "Medium-sized purchases" dropped 5.5%. These were significant drops for both categories and resulted in the lowest scores for the past year. So it can be said that the Consumer Confidence Index for June has fallen due to a natural pullback after the big jump in the desire to spend among women last month and due to reluctance to spend on small everyday items.
- Propensity to consume
for May 2005
53.8 points -
The Consumer Confidence Index for May rose 2.1 points from April to 53.8 points, marking the highest level seen so far this year. The May survey coincided with the long Golden Week holiday period and so there was the clear impression of a stronger desire to spend on "Recreation and leisure". This figure was 3.4 points higher compared to May of last year and it marked the first time in four years that the 53-point level was exceeded. This was the sixth consecutive month that the Consumer Confidence Index was higher compared to the same month during the previous year, clearly demonstrating that consumer confidence in Japan continues to improve. It has been suggested that this increase in personal consumption can be attributed to the improving employment and income environment, highlighted by the recent Cabinet Office announcement that Japan's real GDP enjoyed solid growth during the January-March quarter. The results of this survey also confirm that Japanese consumers are becoming more bullish about spending.
Spending among women was the main driver for the rise in May's Consumer Confidence Index. The propensity to spend among men in May dipped 0.1 point to 49.1, but this was more than offset by the large 4.2 point increase in the propensity to spend among women, which came to 58.5. Compared to May of last year, this marked a 1.6 point gain for men and a huge 5.1 point gain for women.
A simultaneous survey of lifestyle priorities showed that around 65% of men and women expressed the desire to spend more on "Recreation and leisure". This was a large jump of more than 11 points from the previous month. Many people took advantage of the long Golden Week holidays to partake in such activities as traveling abroad, going to hot spring resorts or visiting the Aichi Expo. This resulted in the big jump in the desire to spend on "Recreation and leisure" this May, which was more than 8 points higher as compared to the same month last year.
- Propensity to consume
for April 2005
51.7 points -
April 2005 Consumer Confidence Index Down 0.6 Point to 51.7 Points.
The Consumer Confidence Index for April slipped 0.6 point from March to 51.7 points. The decline can be attributed to concerns about increased burdens being placed on household budgets due to higher annuity and employment insurance fees. However, this figure is still higher compared to April of last year, marking the fifth straight month of on-year gains. This supports the sentiment that consumer confidence is gradually improving. It will be very important to carefully monitor changes in consumer spending heading into the important "Golden Week" holiday season.
The propensity to spend for both men and women fell 0.5 point in April to 49.2 points for men and 54.3 points for women. However, compared to April of last year these scores were actually up 1.5 points for men and up 0.5 point for women. In fact, the on-year scores have been on the rise since March, especially for men. The propensity to spend among men tends to be very sensitive to macroeconomic trends and so a continuation of the current situation may raise hopes for the future direction of the broader economy.
A simultaneous survey of lifestyle priorities showed that the propensity to spend on "daily (minor) purchases" and "medium-sized purchases" increased for both men and women in April as compared to March. With the arrival of the spring travel season, there was an increase in the percentage of men expressing a desire to spend on "Recreation and leisure". In fact, this number came to 54.6% of those surveyed, topping the 50% mark for the first time in nine months. This is further evidence that the desire to spend among men is perking up.
- Propensity to consume
for March 2005
52.3 points -
The Consumer Confidence Index for March rose 0.9 point from February to 52.3 points. During a typical year the index tends to rise in March and that has been the case this year as well. This is the highest score for any March since 2001 and marks the third month in a row in which the index was higher compared to the same month during the previous year. This suggests that consumer confidence continues to improve.
The Bank of Japan's survey of business conditions released in March reported that "personal consumption has held steady even though there are some signs that the overall economy is stalling." The recent movements in the Consumer Confidence Index support this assessment.
The propensity to spend among men rose 1.3 points in March to 49.7 points, and for women sentiment improved 0.4 point to 54.8 points. The March propensity to spend for men has held between 46-47 points for the past three years, but has improved noticeably this year, just missing the key 50-point mark.
Compared to March of last year, the propensity to spend improved 3 points for men and 1.2 points for women. Here again there was a pronounced improvement in the score for men.
This can be attributed to a series of positive factors supporting consumption by men including the recovery in corporate results, an improved employment situation and larger bonuses from employers.
A simultaneous survey of lifestyle priorities was conducted to ascertain a better picture of seasonal trends. The desire to spend on "Recreation and leisure" increase by about 5% for both men and women, as more people took spring vacations and enjoyed flower viewing. This is believed to be another reason behind this increase in the Consumer Confidence Index.
- Propensity to consume
for February 2005
51.4 points -
The Consumer Confidence Index for February fell 1.9 points from January to 51.4 points. During a typical year this index tends to move lower from December into January and February, and it can be said that this trend is being played out this year as well. However, the size of the drop from last month is not considered as being particularly large.
In fact, this was a 0.6 point increase as compared to the same month last year and the figures for both January and February of this year are at their highest levels since 2001. Furthermore, in a typical year the Consumer Confidence Index tends to move higher heading into March, and so there will likely be expectations for improving consumer confidence in coming months.
The propensity to spend among men in February was off 1.6 points from January and this figure was down 2.3 points for women.
However, the propensity to spend was still higher for both men and women as compared to February of 2004. For men there was a 1.1 point increase and for women there was a 0.2 point gain. The score for men was 48.4 points, the highest level since 2001 and the score for women came to 54.4 points, its highest level since 2000. So it can be said that the recovery in consumer confidence seen from around the middle of last year continues to make steady progress.
A simultaneous survey of lifestyle priorities was also conducted to ascertain a better picture of purchasing trends. The propensity to spend on "medium-sized purchases" and "daily (minor) purchases", which were rather high for both men and women in December and January, fell back to more normal levels in February. However, compared to February of 2004, these levels are still rather high. In fact, the score for women was up more than 30% as compared to the same month last year.
Sales at department stores in the Tokyo Metropolitan area, mainly for sundry goods and personal belongings, marked their first on-year rise in 11 months in January. It can be said that these lifestyle priorities are helping to underpin this improving consumer confidence.
- Propensity to consume
for January 2005
53.3 points -
After a big jump in December, the Consumer Confidence Index fell 3.7 points in January to 53.3 points. During a typical year the Consumer Confidence Index tends to move lower from December into January and February and this appears to be the case this year as well.
However, this figure represents a 1.3 point increase over the score for January of 2004. In fact, it is the highest score for any January since 2001. This means that the Consumer Confidence Index has gotten the new year off to a relatively good start, despite a growing sentiment that the economy is slowing. We will need to continue monitoring how this index performs from next month.
The propensities to spend for both men and women were up in January as compared to the same month last year. The propensity to spend among men fell 1.6 points from 51.6 points in December to 50.0 points in January. For women this figure fell a particularly large 5.7 points from 62.4 points in December to 56.7 points in January. However, these figures were still up 0.7 point for men and 2.0 points for women as compared to January of 2004. This suggests that the recovery in consumer confidence since the middle of last year is still in place.
A simultaneous survey of lifestyle priorities showed decreases in the propensities to spend from the previous month by both men and women on "major (expensive) purchases", "medium-sized purchases" and "daily (minor) purchases". However, the size of the drops in the propensities to spend on "medium-sized purchases" and "daily (minor) purchases" were rather small. In fact, women have continued to spend at a fairly high level for items in these categories since December.
This is probably due to stronger demand for winter clothes with the weather suddenly turning much colder, and due to the fact that some stores moved forward their big sales and the year-end sales of popular "fuku-bukuro's", or lucky mystery bags (buyer cannot see what is actually inside but the value of the goods is much higher than the purchase price). Department stores across the board saw double-digit on-year growth in sales for the first day of the new year. There was a big drop in the propensity to spend on "major (expensive) purchases", but after a big jump in such purchases during December it can be assumed that most major purchases using money from winter bonuses had already been made.
