Survey Anticipates Further Rise in Unemployment Rate

By Obinna Chima

Respondents to the Central Bank of Nigeria’s (CBN), ‘Consumer Expectations Survey Report,’ have estimated further rise in unemployment rate in the next one year.

This was disclosed in the survey report for the third quarter (Q3) 2020. According to the report, unemployment index for the next 12 months remained positive at 35.4 points in Q3 2020, It showed that consumers’ overall outlook was negative in Q3, even as consumers were pessimistic in their outlook.

The Q3 2020 survey was conducted during the period September 21- 30, 2020 covering a sample size of 2,070 households drawn from 207. The Enumeration Areas (EAs) were across the country, with a response rate of 99.8 per cent and respondents’ distribution by educational attainment showed that 8.8 per cent had university education; 11.8 per cent had higher non-university education, while 29 per cent had senior secondary school education.

Respondents with junior secondary and primary school education accounted for 5.3 and 19.7 per cent, respectively, while those with no formal education accounted for the balance of 25.4 per cent.

“The consumers’ overall confidence outlook dipped in Q3 2020, as consumers were pessimistic in their outlook. The index at -21.2 point was 25.0 points lower than the index in the corresponding period of 2019. Respondents attributed this unfavourable outlook to declining economic conditions, family financial situation and declining family income.

“The consumers were however optimistic in their outlook for the next quarter and next 12 months with indices of 10.1 and 30.5 points, respectively. This positive outlook could be attributed to the expected increase in net household income, an anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/or have plenty over savings in the next quarter and the next 12 months.

“Most respondents expect prices of goods and services to rise in the next 12 months, with an index of 36.2 points. The major drivers are: savings, purchase of car/motor vehicle, purchase of appliances/ durables, education, food and other household needs and purchase of houses,” the report stated.

The overall buying conditions index for big-ticket items in the current quarter stood at 20.1 points, which indicated that majority of consumers believed that Q3 was not the ideal time to purchase big-ticket items like consumer durables, motor vehicles and house, among others.

According to the survey, the overall buying intention index in the next twelve months stood at 29.7 index points, indicating that most consumers do not intend to buy big-ticket items in the next 12 months.

“The buying intention indices for consumer durables, motor vehicles and house & lot were below 50 points, which showed that respondents have no plans to make these purchases in the next twelve months.

“With indices of 20.8 and 5.3 points, consumers expect the borrowing rate to rise, and anticipate the naira to appreciate in the next 12 months,” it added.

The overall consumer confidence index is computed as the average of the three indices, namely: Economic Condition, Family Financial Situation and Family Income.