MNI Indicators: Russia Consumer Sentiment Nudges Higher In March - Inflation Expectations Lowest Since August 2015

Consumer sentiment rose for the second consecutive month to 71.2 in March from 69.6 in February, the highest level since August 2015.

Consumer sentiment was just a touch below 2015’s average of 71.6, however the month’s rise placed it a little above the March 2015 outturn of 69.2. The improvement could not be attributed to a single factor but to modest strengthening across the board. This could be a tentative signal that conditions across the economy are improving, albeit gradually.
 
In spite of the improvement on the month, the March outturn meant sentiment in Q1 dropped to a series low of 70.0, from 70.2 the previous quarter. Sentiment has fallen in every quarter bar one since Q3 2013, where it sat just under the breakeven mark at 99.6.
 
The Inflation Expectations Indicator slipped to its lowest level since last August, down 0.4% to 154.8 in March from 155.3 recorded in February.
 
Consumers had higher appetite for big ticket items in March, with the Durable Buying Conditions Indicator rising to 79.4 from 77.7 in February. This is the highest the indicator has been since last June.
 
Respondents were less pessimistic regarding their financial situation in March. This was reflected in the Personal Finances Indicator climbing to 68.6, a level not seen since last summer.
 
The Car Purchase Indicator plummeted to series low of 64.1 in Q1 2016 with 33% of respondents citing the cost of use/upkeep exorbitant.
 
On the business front, sentiment towards the current business environment has deteriorated this year with the Current Business Conditions Indicator hitting a series low in Q1. However, short and long-term expectations both picked up on the month.

Commenting on the latest survey, Philip Uglow, Chief Economist of MNI Indicators said, “A second consecutive monthly increase left confidence at the highest since August. It’s probably too early to call this a turning point, but it’s suggestive that the long-term decline may have ended.”
 
“Still, in absolute terms consumer sentiment remains very weak with pessimists still outweighing optimists."