ACSI: Customer Satisfaction Improvement Slows
Q1 2007: Utilities; Transportation & Warehousing; Information; Health Care & Social Assistance; Accommodations & Food Services
The upward trend in the American Customer Satisfaction Index (ACSI) continues, but not all signs are favorable. ACSI is up by 0.40% to an overall score of 75.2 – the second consecutive quarter of all-time highs. Yet, this quarter showed signs of weakness with more decliners than advancers. In addition, the 0.40% increase was down from the 0.70% increase seen in Q4 2006.
Perceptions of quality, as experienced by customers, continues to lag improvements in customer satisfaction. The rise in customer satisfaction is mostly attributable to lower prices. The Consumer Price Index (CPI) did not increase much at the beginning of the year and the higher March CPI was mostly limited to food and energy.
Pricing power depends on upward shifting demand curves. A further upward shift is unlikely unless there is shrinking supply or higher levels of buyer satisfaction. There are no signs of shrinking supply in most industries, so buyer satisfaction becomes more critical in supporting continued growth in consumer spending.
While most forecasters predicted a weakening of consumer spending in the final quarter of 2006 and also for the first quarter of 2007, ACSI data pointed to an increase in spending growth of 3.5% to 4.1%. Actual first quarter growth was 3.8%, in the middle of that range. The forecast for the second quarter is continued spending growth, but at a more modest level of 3.1% to 3.9%.
For more information on the ACSI and its most recent release, visit www.theACSI.org.
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