Russian consumers more upbeat in August but optimism fragile – MNI Indicators

By Andrei Skvarsky.

The average Russian consumer felt slightly more upbeat in August than in July, Deutsche Boerse-owned intelligence company MNI Indicators said with the reservation that the alleged uptick was “barely off the lows witnessed in March” and warning it might be short-lived.

MNI Indicators said in a statement that a survey in August that was one of its monthly polls of urban Russian consumers had preceded a major fall in global oil and other commodity prices, and that this rout might affect sentiment.

Ever since the surveys were launched in March 2013, “the fortunes of Russian households have been tightly linked to those of the oil price”, the London-headquartered firm said.

July’s survey had showed a decline in consumer sentiment. Though the latter had picked up since March to a six-month high in June, “most of these gains were wiped out by the fall in July”, the August statement said.

Respondents in August’s survey felt their personal financial status had improved year-on-year, they were more willing to buy big ticket items than the month before, and were more optimistic than in July about overall business conditions in Russia in one year’s and in five years’ time.

However, their expectations for their personal finances in one year had edged down since July.

MNI Indicators also said demand in the country’s residential real estate market had risen somewhat since the start of the year but remained weak in absolute terms, and that prices for homes were expected to go up.

The returns of the surveys, in which at least 1,000 people in cities across Russia who are selected randomly by a computer are interviewed by telephone, are used to update what is called the MNI Russia Consumer Sentiment Indicator.

In a comment on the August poll, MNI Indicators chief economist Philip Uglow said: “In spite of this month’s rise in consumer confidence there is little to cheer. Sentiment is down nearly 30% from the more positive tone seen two years ago, with the majority of respondents holding a negative view… Inflation expectations fell slightly in August but remain at a high level.”