Today the Conference Board announced that US Consumer Confidence is at a 5 year high- so B2B should be in for better times. But first some details of the methodology and measure of the consumer confidence index.
The Consumer Confidence Index is made up of five measures two of which relate to consumer perceptions of the current situation and three measures that relate to expectations about the future. Through a random mail survey consumers are asked to respond in three categories (a) positive (b) negative and (c) neutral to the five questions. The survey was started in 1967 on a bimonthly basis and now is done on a monthly basis since 1977 and more details are available in a technical note of the Conference Board. The questions, paraphrased from the technical note, are:
- Consumer Present Situation Index:
- Do you think that the current business conditions are positive, negative or neutral?
- Do you think that the current employment conditions are positive, negative or neutral?
- Consumer Expectations Index:
- Do you think business conditions six months from today will be positive, negative or neutral?
- Do you think employment conditions six months from today will be positive, negative or neutral?
- Do you think your total family income six months from today will be positive, negative or neutral?
Interestingly, the Expectations Index in May 2013 rose to 82.4 from 74.3 in April 2013 or a rise of 8.1 points compared to the Present Situation Index that rose to 66.7 in May from 61 in April or a rise of only 5.7 points. In other words, consumers are upbeat for the holiday season six months from now.
As retailers take notice of the consumer sentiment and expectations, we can expect that in a whole range of consumer goods the supply chain will start getting revved up and more orders should flow to brand suppliers.
One might ask: what about capital equipment and technology spending?....well when consumer demand goes up as the consumer confidence index is predicting that more production is needed. More production and faster moving sales will surely spike technology demand as well. For all B2B is ultimately driven by consumer demand of which the consumer confidence index is a leading indicator.
Happy days might be here for B2B in the US. This is the time for B2B companies to step up their digital marketing and sales efforts. Contact StratoServe.