CEA: Consumer Confidence Down Sharply22 Mar, 2011 By: Erik Gruenwedel
Confidence in economy among consumers rattled by the earthquake and tsunami in Japan, slumping housing market and rising gas prices took a big hit in March, falling more than 10 points, according to new data from the Consumer Electronics Association.
The CEA Index of Consumer Expectations, which measures consumer confidence about the broader economy, fell more than 10 points to 161.4. The ICE is down for the second straight month and is slightly lower than this time last year.
The CE industry continues to be hit from multiple sides as production of HDTV and 3DTV units, Blu-ray Disc players, chips and hard drives in Japan coupled with a depressed housing market and ongoing foreclosures increase pressure on retail prices and decrease demand.
Consumer sentiment indexes, which include expectations from 1,000 respondents regarding the economy, job market and personal finance, fared no better. Expectations for economy fell to 35.7 (from a scale of zero to 200) compared with 36.7 a year ago. Confidence in the economy increased to 80.9 (from 80.1); personal finance dropped to 44.8 (46.2); expectations of buying CE fell to 46.3 from nearly 50, while expectations among respondents to spend more than before on CE fell to 32.3 from 33.7 a year ago.
“Increasing geopolitical concerns around the globe and weak results for the housing market domestically, coupled with the tragedy in Japan, have kept consumers on edge,” said Shawn DuBravac, chief economist with the CEA. “Consumers are still adjusting to higher gas prices, which affects spending on the remaining categories, including tech.”