Survey:ICEA LION Asset Management Consumer Spending Index Q2 2024

• Award Winning Fund Manager ICEA LION Asset Management releases the Second Quarter 2024 ILAM Consumer Spending Index “Individual spending trends rise again while retail business sales trends flatline”

East Africa’s pioneering investment management firm, ICEA LION Asset Management,released the 2Q24 ILAM Consumer Spending Index, with the theme ‘Individual spending trends rise again but retail business sales trends flatline Speaking at the event, Richard Muriithi, Senior Portfolio Manager at ICEA LION Asset Management highlighted the following key trends:

• Income trends worsen slightly

Half of respondents indicated static income levels over the last year, while 30% reported lower income and less than 20% saw their incomes rise in the second quarter of 2024 compared to the same period in 2023. This represented a deterioration from the first quarter of 2024 when 25% of respondents noted increases and decreases in their income respectively.

Respondents working in the manufacturing and education sectors had the highest proportions of improved incomes while those in the trade, transport and logistics sectors had the largest proportion of reduced incomes.

• ILAM Consumer Spending Index rises by 5.5% in 2Q24

The ILAM Consumer Spending Index rose by 5.5% in the second quarter of 2024 driven by a rise in individual spending that offset static retail business sales trends.

• Individual spending trends improve

Individual spending trends improved by 11% in the second quarter of 2024 compared to first quarter.

The additional spending was mainly driven mainly by women and consumers aged between 26 and 35.

The rise in spending was largely attributed to higher cost of items purchased.

In terms of socio-economic categories, the lower middle-income segment recorded the strongest improvement in spending trends in the second quarter, while the lower income segment had the biggest decline in spending trends. 87% of respondents made purchases using their own income, while 13% relied on credit.

• Retail business sales trends flatline

Retail business sales trends remained flat between the second quarter of 2024 and the first quarter.An improvement in sales trends in large and medium sized businesses during the second quarter was offset by a decline in sales trends in small and micro businesses.

In terms of business sectors, the clothing, retail shopping and food & beverage sectors saw an improvement in sales trends in the second quarter but this was offset by a plummeting of sales trends in the house fittings and accessories sectors.

In closing, ICEA LION Asset Management CEO – Einstein Kihanda, who is also the immediate former Chairman of the Institute of Certified Investment and Financial Analysts (ICIFA) summarized thus: “Individual spending trends continued to remain resilient in a challenging economic environment while retail business sales trends remained relatively muted”