English Top > Lifestyle Conditions > 2006
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 2006
53.4 points -
Japanese consumption ended 2006 on a very strong note with the Consumer Confidence Index for December increasing 4.9 points from November to 58.3 points. As with November, this marked the highest level since 2001 and was a 0.7-point gain over December of last year.
The average Consumer Confidence Index for 2006 came to 53.4 points, which was the highest since 2001. On a yearly basis it is clear that after bottoming in 2003, consumer confidence has turned around and has since enjoyed a steady recovery in line with the expanding "Heisei" economic boom. The economic expansion is expected continue into next year and so consumer confidence should see a further recovery. These developments will need to be carefully monitored.
A breakdown of December's Consumer Confidence Index by gender reveals a 3.7-point on-month gain for men to 53.2 points and a big 5.9-point jump for women to 63.4 points. This was the highest level for women since 1997. Compared to December of last year this marked a 0.8-point retreat for men, but a 2.0-point gain for women.
The average consumer confidence score for men for all of 2006 was 49.4 points, the highest average since 2002, while the 2006 average for women was 57.5 points, the highest mark since 2001.
A simultaneous survey of lifestyle priorities showed a noticeably strong desire to "purchase things", likely due to the higher winter bonuses paid this year. Men demonstrated a strong desire to spend on "major (expensive) purchases" and "medium-sized purchases", while women were eager to spend on "medium-sized purchases" and "small everyday items".
- Propensity to consume
for November 2006
53.4 points -
The Consumer Confidence Index for November increased 0.7 point from October to 53.4 points, marking the highest score for any November since 2001. Compared to November of last year this was a 2.0-point gain, the biggest rate of increase for any month this year. In October of this year Japan's current period of economic expansion matched the great "Izanagi Boom" (57-month expansion lasting until 1970) and appears likely to continue growing.
A report in late October by the Keidanren (Federation of Economic Organizations) showed that major corporations are expected to pay record high winter bonuses in 2006 for the second straight year. In a typical year the propensity to spend tends to increase in December. This is expected to be especially true this year thanks to the bigger bonuses.
A breakdown of November's Consumer Confidence Index by gender shows a 1.7-point on-month gain for men to 49.5 points, but a 0.2-point retreat for women to 57.5 points. Compared to November of last year this was a big 3-point gain for men and a 1.2-point gain for women. In fact, the score for men was the highest for any November since 2001 and the propensity to spend among women also remains very strong.
A simultaneous survey of lifestyle priorities uncovered something of a reversal of roles from last month with men, not women, showing a stronger propensity to spend on "medium-sized purchases" and "major (expensive) purchases". There was increased interest among men to spend on "housework and household affairs", while women were interested in spending more on "life with family". The holiday season seems to increase interest in spending on the home and family.
- Propensity to consume
for October 2006
52.7 points -
The Consumer Confidence Index for October slipped 0.1 point from September to 52.7 points. However, this still marked a 1.6-point gain over September of last year, scoring the second biggest on-year gain this year.
The Consumer Confidence Index has increased steadily throughout this year and has made nice on-year recoveries in September and October after a slight setback in August. Overall there has been an average gain of 0.8-point as compared to the same period last year. This underscores the steady recovery in the nation's propensity to spend.
Furthermore, the September "Economy Watchers" survey released by the Cabinet Office also showed a recovery trend, reflecting the fact that the current economic conditions are on par with the great "Izanagi Boom" (57-month economic expansion lasting until 1970). So we can expect a further increase in the Consumer Confidence Index toward the end of the year.
A breakdown of the October Consumer Confidence Index by gender shows that the score for men dropped 1.5 points from September to 47.8, while the figure for women climbed 1.4 points to 57.7, resulting in a nearly 10-point difference between the sexes. The propensity to spend among women has been particularly strong. In fact, this was the second straight month in which the score for women came to its highest level since 2000. Compared to October of last year, these scores represented a 0.6-point gain for men and a big 2.7-point jump for women.
A simultaneous survey of lifestyle priorities showed among women an increase in the propensity to spend on medium-sized purchases and major (expensive) purchases. There were not any other major on-month changes for the other categories, but the figures suggest that more money is being spent on social interaction. In particular, men were spending more on "work" and "study", while women were loosening up their purse strings more for items related to "housework and household affairs".
- Propensity to consume
for September 2006
52.8 points -
The Consumer Confidence Index for September inched up 0.3 point to 52.8 points. This was a 0.9-point gain over September of last year and marked a nice recovery from the on-year decrease seen in August. Despite the slight pause in August, which can be blamed on poor weather and a few other factors, the long-term bullish consumption trend appears to be holding steady. This rise in the Consumer Confidence index is a pleasant surprise as the propensity to spend tends to fall in September. This is further evidence that the recovery for the Japanese economy remains very strong. The bounce back in the propensity to spend this month raises expectations for strong spending toward the end of the year as the Consumer Confidence Index typical begins working higher from October.
A further breakdown of the September Consumer Confidence Index by gender shows a 0.9-point on-month drop for men to 49.3, but a 1.4-point gain for women to 56.3. In fact, the score for women was the highest for any September since 2000. Compared to September of last year this marked a 1.1-point increase for men and a 0.6-point gain for women. This was also the third straight month in which the score for men was better compared to the same month one year ago.
A simultaneous survey of lifestyle priorities showed a nice recovery, among both men and women, in the desire to "purchase things", which fell noticeably last month. Consumers probably found a little more confidence in terms of purchasing things since the calendar turned to September. Also, in August there was less spending on "recreation & leisure" as men tended to spend more on "work" and "study", while women focused more of their financial resources on "work", life with family and "study".
- Propensity to consume
for August 2006
52.5 points -
The Consumer Confidence Index edged downward 1.9 points in August to 52.5 points. This was also a 0.1-point decrease over July of last year, marking the first time in six months the index fell below the prior year level. The sense is that the Consumer Confidence Index, which has been very positive recently, is taking a momentary breather. The cause of this month's decline is believed to reflect consumers' hesitation to purchase summer goods and spend on travel because of factors such as changeable weather affected by a long rainy season and the sudden jump in gasoline prices.
In the Diffusion Index released by the Cabinet Office on August 8, the economic assessment was changed slightly in a downward direction. For our survey as well, we will want to monitor this trend closely from September. A breakdown of the August Consumer Confidence Index by gender shows a 1.1-point increase on-month for men to 50.2 and a 4.9-point drop for women to 54.9. Compared to July of last year, this was a 1.4-point gain for men and a 1.5-point decline for women. This was the second consecutive month in which men indicated more positive sentiment over the previous month, but for women the index was down substantially in August, reaching the lowest value since 2002.
Turning to the simultaneous survey of lifestyle priorities, the percentage values for "recreation and leisure" remained at a certain level, reflecting the fact the survey was conducted during the summer vacation period. In reaction to diverting their funds to this category, however, both men and women decreased their interest in "consumer goods." Especially conspicuous was the decline in desire for "major (expensive) purchases," which had reached the highest level for this year in July. For women, the score for "medium-sized purchases" was down sharply as well. It appears that in reaction to last month, women also are feeling a strong sentiment to refrain a bit from shopping.
A recovery in "consumer goods", which is strongly linked to a desire to consume, is expected to occur after September, once the leisure season has ended.
- Propensity to consume
for July 2006
54.4 points -
The Consumer Confidence Index rose 3.0 points in July to 54.4 points, recovering from the drop off in June to top 54 points for the second time this year. This marked the first time in five years that the 54-point line was topped twice within the first seven months of the year. This was also a 0.2-point increase over July of last year, extending the streak of on-year gains for a fifth month. There have been some economic uncertainties, particularly in terms of the stock markets and oil prices. However, on July 6 the Cabinet Office released its Diffusion Index confirming that the economy continues to enjoy a strong recovery and that Japan's current period of economic expansion is the second longest since the end of World War II, even longer the growth stage during the bubble economy period. These conditions suggest that consumer trends will continue improving.
A breakdown of the Consumer Confidence Index by gender shows a 2.0-point increase on-month for men to 49.1 and a 4.0-point increase for women to 59.8. For the second month in a row the score for women hit its highest level since 2000 and now looks ready to test the 60-point mark. Compared to July of last year this marked a 0.4-point gain for men and a modest 0.1-point improvement for women. July's score for men is a nice improvement over June when sentiment was hurt by falling stock prices.
A simultaneous survey of lifestyle priorities showed that the desire to "consumer goods" remains strong for both men and women. In particular, 13.0% of the men and 11.9% of the women in July's survey said that they wanted to spend on "major (expensive) purchases", which were both the highest levels for this year. Scores for "daily (minor) purchases" and "medium-sized purchases" also remained high in July. This suggests that Japanese consumers are continuing to loosen their purse strings.
- Propensity to consume
for June 2006
51.4 points -
The Consumer Confidence Index for June fell 3.1 points from May to 51.4 points. During a typical year consumption tends to fall off in June and that appears to be the case this year as well. However, this marked a 0.6-point gain over June of last year. In fact, this was the fourth straight month of on-year gains, suggesting the broader consumption trend remains strong.
The government's monthly economic report concluded that "the economy continues to recover, led by personal consumption". However, consumer sentiment has been chilled somewhat recently by the sharp drop in stock prices and other factors. Fortunately, consumer confidence in June was higher than the level for June of last year, which can be seen as a hopeful sign that consumption will remain strong in the coming months.
A breakdown of the Consumer Confidence Index by gender shows a drop in the scores for both men and women as compared to May. On month there was a 3.6-point drop for men in June to 47.1 and a 2.5-point drop for women to 55.8. Compared to June of last year this marked a 1.2-point drop for men, but a 2.4-point increase for women. The recent weakness in the scores for men has been particularly pronounced. However, in May the score for men topped 50 points to hit the highest mark since 2001 and this month the score for women hit its loftiest mark since 2000, underscoring the overall bullish tone.
A simultaneous survey of lifestyle priorities showed that the desire to "consume goods" remains strong for both men and women. Men tend to be sensitive to macroeconomic changes and so the recent stock market correction can be seen as a likely cause for the lower scores for men this month.
- Propensity to consume
for May 2006
54.5 points -
The Consumer Confidence Index for May rose 1.1 point from April to 54.5. This marked a 0.7-point gain over May of last year and was the highest score for any May since 2001. The index has recorded three straight months on on-year gains as consumption remains strong.
The recovering economy has helped to expand corporate earnings and improve the employment situation, which both have had positive impacts on personal consumption. This year's Golden Week holiday saw very active movements of people and goods, which likely played a role in the strong personal consumption. The Consumer Confidence Index for June, which tends to decrease during a typical year, will need to be watched carefully in order to have a better idea of the future direction of these consumption trends.
A breakdown of the Consumer Confidence Index by gender shows surprisingly big gains for men. On month there was a 1.7-point gain for men in May to 50.7 points and a 0.4-point gain for women to 58.3 points. This represented a 1.6-point gain for men when compared to May of last year, but a 0.2-point drop for women.
A simultaneous survey of lifestyle priorities shows that scores for "major (expensive) purchases", "medium-sized purchases" and "daily (minor) purchases" have all settled around their respective averages for both men and women, as was the case last month. However, there has been a big increase in the number of people looking to spend more aggressively in the areas of "hobbies & pastimes" and "recreation and leisure". These behavior patterns suggest a stronger desire to spend heading into the summer and it seems safe to assume that a bigger chunk of summer bonuses will be spent this year.
- Propensity to consume
for April 2006
53.4 points -
The Consumer Confidence Index for April remained unchanged from March at 53.4 points. However, this marked a 1.7-point gain over April of last year and was the highest score for any April since 2002. Various statistical data released by the government and mass media suggest that incomes are rising, consumer sentiment is improving and personal consumption is expanding. Purse strings are gradually loosening and there is the sense that consumers are now willing to spend a little more for good items in such areas as fashion, home electronics, dining and travel. Summer bonuses are forecast to be bigger than last year and so there are expectations that the propensity to spend will increase toward the summer when there will be more opportunities to spend on leisure and amusement activities.
A further breakdown of the Consumer Confidence Index by gender shows a 2.1-point drop for men in April to 49.0 points, but a 2.2-point gain for women to 57.9 points. Compared to April of last year there was a 0.2-point dip for men, but a 3.6-point gain for women. April scores for women have enjoyed big improvements over the previous month and on-year. In fact, this was the best April score for women since 2001.
A simultaneous survey of lifestyle priorities showed that the scores for "major (expensive) purchases", "medium-sized purchases" and "daily (minor) purchases" have all settled around their respective averages. However, the area of "recreation & leisure" points to strengthening consumption patterns for both men and women heading into the early summer period.
- Propensity to consume
for March 2006
53.4 points -
The Consumer Confidence Index for March climbed 2.5 points from February to 53.4 points. This was a 1.1-point increase over March of last year and was the highest score for any March since 2002. Improving corporate earnings are having a positive impact on household budgets in terms of better employment conditions and a recovery in salaries. With the economy continuing to improve, there are expectations that consumer confidence figures from next month onward will remain strong.
The Consumer Confidence Index rose a big 4.2 points to 51.1 for men in March and 0.8 point to 55.7 for women. Compared to March of last year this marked a 1.4-point gain for men and a 0.9-point rise for women. In fact, this was the first time that the March score for men topped 50 points since 2001. Consumer confidence among women also remains strong as this was the third straight month of on-year gains for women.
A simultaneous survey of lifestyle priorities showed high scores for the purchasing categories of "major (expensive) purchases", "medium-sized purchases" and "daily (minor) purchases" for both men and women. This suggests that the desire to "consume goods" is as strong as it was at the end of last year. Some of the items that the respondents to this survey said that they hope to buy include spring fashions, flat-screen TVs and cars.
- Propensity to consume
for February 2006
50.9 points -
The Consumer Confidence Index for February dropped 2.6 points to 50.9 points. During a typical year the propensity to spend tends to fall off in February and that appears to be the case this year as well. However, this marks a 0.5-point decline compared to February of last year, which is somewhat unexpected considering the strong start to this year seen in the figures for January. It is very likely that the instability in the stock markets seen in late January had a negative impact on February's survey. It will be important to continue to carefully monitor this trend from March onward.
The Consumer Confidence Index retreated for both men and women in February. The propensity to spend among men fell 2.3 points to 46.9, while the score for women slipped 2.8 points to 54.9. Compared to February of last year this represented a 1.5-point drop for men, but a half point increase for women. In fact, this was the highest February score for women since 2001 and can be seen as a continuation of the strong spending pattern seen among women since January.
The February score for men fell compared to the previous month and on-year. However, a simultaneous survey of lifestyle priorities showed a big improvement in the desire to spend on "major (expensive) purchases". The figures for the desire to spend on "medium-sized purchases" and "daily (minor) purchases" were also within the standard ranges. Looking simply and this buying behavior, we cannot say that sentiment among men has become negative in terms of "consuming goods". From this viewpoint it can be assumed that the drop in the score for men in February is a temporary phenomenon attributed to unique psychological factors.
- Propensity to consume
for January 2006
53.5 points -
The Consumer Confidence Index for January fell 4.1 points from December to 53.5 points. During a typical year the propensity to spend tends to fall off in January in response to increased spending in December. However, this figure was actually 0.2 points higher compared to January of last year and it was the highest score for any January since 2002. So looking at the overall Consumer Confidence Index, it appears that consumption in 2006 has gotten off to a strong start.
The sudden investigation of Internet start-up firm Livedoor Co. rattled Japanese stock markets this month in what has been dubbed the ?Livedoor shock?. There are now some concerns about the direction of the stock markets and so consumer trends from February will need to be carefully monitored.The Consumer Confidence Index fell for both men and women in January. The propensity to spend among men dropped 4.8 points to 49.2, while the score for women retreated 3.7 points to 57.7 points. However, compared to January of last year, this marked a 0.8 point drop for men, but a 1-point gain for women. In fact, the January score for women was the highest in three years.
A simultaneous survey of lifestyle priorities showed a big fall off in the desire to spend on ?major (expensive) purchases? for both men and women after this category hit a record high in December. Bonuses late last year were at record high levels and this contributed to greater spending on more expensive items and travel. However, it now seems that consumers want to put off big purchase in January after spending so much in December. It can be assumed that this change in mentality contributed to the drop in the Consumer Confidence Index in January.
