The Consumer Confidence Index (CCI) gauges how optimistic or pessimistic consumers are about the economy and their financial situations. The majority of the time, it is based on surveys that evaluate how consumers feel about the state of the economy today and what they anticipate for the future.
The improvement in OECD consumer confidence, which initially emerged in Q4 2022, became more evident in Q1 2023. Following a sustained decline over a period of 14 months, it began to rebound in September 2022, reaching a low point of 95.6 index points for OECD Europe. Notably, consumer optimism started to rise as economies emerged from the pandemic, but the subsequent Russia-Ukraine war acted as a catalyst, leading to disruptions in global supply chain systems. This was characterized by slowed exports from Russia, rising shipping prices, delays in trade on the Asia-Pacific Lane, port congestions, and freight forwarders seeking alternative routes. These circumstances, coupled with a rise in inflation, resulted in an erosion of the purchasing power of individuals.
In April 2023, the consumer confidence index experienced a notable upturn, reaching 98.1 index points, reflecting a 2.6% increase compared to September 2022. This positive trajectory aligns with the latest Deloitte Consumer Confidence Index findings for the UK. The prolonged rise in consumer sentiment, observed since the Russia-Ukraine war, holds the potential to exert a favourable impact on the logistics industry. Fluctuations in consumer spending behaviour often coincide with heightened confidence, leading individuals to display a greater willingness to invest in goods and services. Consequently, this increased consumer demand has the potential to generate higher shipment volumes and increased transportation requirements, thus benefitting the logistics sector. Furthermore, there is a likelihood that the heightened demand and economic optimism may prompt businesses to augment their inventory levels in preparation for anticipated demand. As a result, there may be an increased need for warehousing facilities and a rise in logistics activities to effectively manage and distribute the expanded inventory.
Overall, consumer confidence plays a crucial role in shaping consumer behaviour and demand for logistics services. The Logistic experts need to closely monitor changes in consumer confidence and adapt their operations and strategies to meet shifting market dynamics.
Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry.
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