Consumer confidence is based on a number of questions from the Consumer Confidence Survey. For this survey, every month about one thousand households are interviewed by telephone. The households differ every month. The survey is conducted during the first ten working days of the month.
Five of these questions are used to calculate consumer confidence. These questions concern:
- the general economic situation in the next twelve months
- the general economic situation in the previous twelve months
- the households’ own financial situation in the next twelve months
- the household’s own financial situation in the previous twelve months
- whether it is a favourable time to purchase expensive durable goods (e.g. car, furniture, washing machine).
For the first four categories the answer options are:
· clearly worse;
· slightly worse;
· slightly better;
· clearly better.
Consumers can answer the last question by reporting whether they think it is a favourable, time, an unfavourable time, or neither. All five questions can also be answered by ‘don't know’.
For each component question, the percentage of consumers giving a certain answer is calculated. All consumers have an equal weight. Subsequently, for each component question the percentage of pessimists (respondents answering slightly or clearly worse) is subtracted from the percentage of optimists (respondents who think that the situation is slightly or clearly better). Consumers who answer neutrally or who don’t know are not included in the calculation. The unweighted average of the net outcomes of the five questions is the consumer confidence score. Seasonal effects are removed from the figures.
Composition of consumer confidence