This research studies focuses on the level of consumer confidence of the residents in Batangas and Lipa City. This chapter includes introduction, background of the study, statement of the problem, conceptual framework, research hypothesis, scope and delimitation, significance of the study and definition of terms.
Consumer confidence is defined as that which consumers feel about the overall state of the economy and their personal financial situation. How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if consumer confidence is higher, consumers are making more purchases, boosting the economic expansion. On the other hand, if confidence is lower, consumers tend to save more than they spend, prompting the contraction of the economy. A month-to-month diminishing trend in consumer’s confidence suggests that in the current state of the economy most consumers have a negative outlook on their ability to find and retain good jobs (CCB, 2000).
In simple terms, increased consumer’s confidence indicates economic growth in which consumers are spending money, indicating higher consumption. Decreasing consumer confidence implies slowing economic growth, and so consumers are likely to decrease their spending. The idea is that the more confident people feel about the economy and their jobs and incomes, the more likely they are to make purchases. Declining consumer confidence is a sign of slowing economic growth and may indicate that the economy is headed into trouble (Conference Board, 2000).
Generally this paper aims to determine the level of consumer confidence of the residents in Batangas and Lipa City. Specially, it aims to identify which forces greatly affect the consumer spending in terms of food, education and transportation and to prove that consumer confidence must not be disregarded in