The Impact of the COVID-19 Pandemic on Consumer and Business Confidence Indicators

Deimante Teresiene,Ruihui Pu,Rasa Kanapickiene,Siyan Hu,Xiao-Guang Yue,Xiao-Guang Yue,Xiao-Guang Yue,Xiao-Guang Yue,Greta Keliuotyte-Staniuleniene,Yiyi Liao

doi:10.3390/jrfm14040159

Abstract

The COVID-19 pandemic and induced economic and social constraints have significantly impacted the confidence of both consumers and businesses. Despite that, comprehensive studies of the impact of the COVID-19 pandemic on the consumer and business sentiment are still lacking. Thus, in our research we aim to identify consumer and business confidence indicators’ reaction to the spread of the COVID-19 pandemic in the Eurozone, the United States, and China. For this purpose, we used the method of correlation–regression analysis. We chose the consumer-confidence index, manufacturing purchasing manager’s index, and services purchasing manager’s index as dependent variables; and the number of confirmed cases of COVID-19, the number of deaths caused by COVID-19, and the mortality rate of COVID-19 infections as independent variables. The results showed a relatively rapid and robust effect of COVID-19 in the short period, but longer-term results depended on the region and were not so unambiguous: in the case of the Eurozone, the spread of COVID-19 pandemic did not affect the consumer-confidence index (CCI) or, in the cases of the United States and China, affected this index negatively; the purchasing managers’ index (PMI) in the services sector was significantly negatively affected by the mortality risk of COVID-19 infection; and the impact on the purchasing managers’ index (PMI) in the manufacturing industry appeared to be mixed.

Highlights

The COVID-19 pandemic has been a big shock for the global economy, but this crisis is different from other types of situations—especially a financial or banking crisis
As we aim to analyze the reaction of both consumers and businesses to the COVID-19 pandemic, three different economic sentiment indicators—the consumer-confidence index (CCI), and the purchase manager’s indices for manufacturing and services were selected
This section analyzes the dynamics of the selected economic-sentiment indicators in the Eurozone, United States, and China

Summary

Introduction

The COVID-19 pandemic has been a big shock for the global economy, but this crisis is different from other types of situations—especially a financial or banking crisis. The main difference is the level of impact and the causes of the problem. Consumer confidence and economic sentiment are the critical drivers for future economic growth. The health crisis of the COVID-19 pandemic and lockdowns had a significant impact on society. Those changes can be seen in consumer and business confidence indicators. It is essential to analyze how this demand and business sentiment changed in the COVID-19 environment to better analyze the possible consequences in the future

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Conclusion