Consumer Demand Surveys Versus Consumer Confidence and Sentiment Surveys
Consumer demand surveys are interview based statistical surveys that measure the percentage of households that will buy a car, white goods, PCs, TVs, home furnishings, kitchenware or toys in, for example, the next three-month period. The surveys provide a percentage of those who will purchase more, less or the same amount of food and clothing in the next three months than in the corresponding period the year before. If you ask people about their purchasing behavior within the coming six or twelve months, there will be more of those who “hope to be able to buy”, than if consumers are asked about what they will purchase in the next three months. The shorter the time spans, the closer to actual behavior.
Consumer confidence and sentiment surveys measure how people are doing financially, how they look at the overall economy of the country or business conditions in the country, if they think that the government is doing a good or a poor job and if people think that it is a good or a bad time to buy a car or to buy or sell a house.
When the business cycle is fairly stable, consumer demand surveys and consumer confidence and sentiment indices will often correlate closely and indicate the same direction of the economy, but in times with a high degree of economic or political uncertainty or during a prolonged crisis, the two types of consumer surveys might differ significantly. In 2011 the confidence and sentiment surveys went up from March to April, while consumer demand surveys dropped significantly. In August 2011 the confidence and sentiment surveys dropped significantly and stayed low during September and October, while consumer demand surveys showed resilience, a development confirmed later by official statistics.
Thomson Reuters/University of Michigan and the Conference Board both publish a monthly consumer confidence and attitude survey. The Institute for Business Cycle Analysis publishes a monthly consumer demand survey known as US Consumer Demand Indices.
Read more about this topic: Consumer Confidence Index
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—Samuel Johnson (1709–1784)