Living Standard in Romania

Changes and Perspectives 2010

Objectives

The survey aims to identify the living standard of the Romanian urban population and perspectives on the current year. The research covers:

The perception of Romanians regarding their personal welfare, both at the level of 2009, and by comparison with the previous years(2006-2008) The intention of carrying out certain activities such as investments and contracting of credits in 2010 The intention to change certain behaviors in 2010 Major concerns related to 2010

Contents

Part 1 Living Standard in Romania

Living Standard Evolution 2006 vs. 2007 vs. 2008 vs. 2009 Income Sources Purchasing Power

Part 2 Perspectives on 2010

Contracting Credits Installments acquisition of goods Investments Buying Behavior Ways of spending holidays Trends Worries for 2010

Living Standard in Romania

Approximately half of Romanians living in the urban environment consider they have lived worse or much worse in 2009 as compared to 2008. In spite of this, by contrast to the beginning of the previous year, the pessimism level has decreased. This attitude shift is partially justified by the fact that Romanians took measures to adapt to changes in the previous year. Thus, they diversified their income sources, as evidenced by the increase in the percentage of those who earned incomes from additional activities and of those who received money from relatives. Consequently, although the share of the salary/pension within the total income decreased, the average income per family member and the purchasing power remained almost constant. For this year, there are signs that the financial behavior will be more conservative related to taking out loans and more open to savings and investments. Thus, the intention to acquire goods in installments and the intention to take out loans record a lower level as compared to the beginning of the previous year. However, Romanians are more willing to save and invest as compared to the same period of 2009. In what holidays are concerned, although at the start of 2009 the intention to spend the holidays abroad was at a high level, Romanians finally chose trips in the country rather than abroad. Despite this change of plans, the intention to spend the holidays abroad remains at the same level as in the beginning of 2009.

Perspectives on 2010

Romanians major reasons of concern regarding 2010 are related to price increases, a decrease in their personal incomes and the outbreak of epidemics. The activities that Romanians intend to carry out this year are grouped in 3 categories, according to the intensity with which they will be done in comparison with 2009: to a higher extent, to the same extent or to a lower extent. The first category comprises only going to church, while the second one - reading books and attending courses/ trainings. On the other hand, the third category contains the largest number of activities, out of which those who could be affected to the highest extent are: going out in clubs/restaurants/bars, playing computer games, paying for services through the credit/debit card and going to the cinema/theaters/concerts. All in all, 2010 seems to be a year marked by: caution, a tighter control of expenses and the intention to allocate resources for spending the vacation rather than for going out and for small indulgences.

Methodology

Research method
Survey

Target population
Respondents aged 18 to 65, living in urban environment

Data collection technique

telephonic interviews

Sample size
2010 1000 / 2009 1003 respondents / 2008 - 1002 respondents / 2007 - 1000 respondents

Fieldwork
13 31 January 2010 / 21 January 27 January 2009/ 22 January 4 January 2008/ 18 22 January 2007

Error ratio
+/- 3 %

Part 1: Living Standard Evolution in Romania

1.1 Living Standard Evolution 1.2 Income Sources 1.3 Purchasing Power 1.4 Evolution of purchase power 1.5 Income Evolution

Perception over the living standard (in comparison to the previous year)

%
Much worse Worse

Better

Much better

%
About the same

2009 vs. 2008 N=1000 2008 vs. 2007 N=1003

13.2

35.5

11.21.8

38.3

8.9

21.8

29.1

3.5

36.6

2007 vs. 2006

N=1002 2006 vs. 2005 N=1000

7.7

19.8

29.5

2.9

40.1

4.4 14.9

33.5

3.5

43.7

Q 1. How do you appreciate your living standard in 2009 in comparison to 2008? Q 1. How do you appreciate your living standard in 2008 in comparison to 2007? Q 1. How do you appreciate your living standard in 2007 in comparison to 2006? Q 1. How do you appreciate your living standard in 2006 in comparison to 2005?

Significant differences between 2009 and 2008 (confidence level of 95%)

Perception over the future evolution of the living standard

%
Much worse Worse

Better

Much better

%
About the same

2010 vs. 2009 N=1000 2009 vs. 2008 N=1003 2008 vs. 2007 N=1002 2007 vs. 2006 N=1000

19.5

30.0

15.8 2.0

32.8

19.1

36.0

16.0 1.4

27.4

8.4

23.1

31.2

4.8

32.5

4.1 16.7

39.4

5.7

34.1

Q 2. How do you think your living standard will be in 2010 in comparison to 2009? Q 2. How do you think your living standard will be in 2009 in comparison to 2008? Q 2. How do you think your living standard will be in 2008 in comparison to 2007? Q 2. How do you think your living standard will be in 2007 in comparison to 2006?

Significant differences between 2010 and 2009(confidence level of 95%) Significant differences between 2009 and 2008 (confidence level of 95%)

Income sources
Income sources in 2009 Income sources in 2008 Income sources in 2007 Income sources in 2006 N=1000 N=1003 N=1002 N=1000

10

The salary from base activities Money from parents/relatives Allowances / social aid / scholarships Pension Income from own business, own company Salary from additional activities, besides job Income from agricultural activities or lease Sales of real estate, from land, houses Rent of buildings DK/NA
28.8 19.2 17.8 19.5 18.5 15.5 8.5 8.9 12.6 13.0 13.8 16.5 14.2 12.4 12.3 11.0 16.8 12.3 8.6 8.0 4.6 3.6 1.7 3.2 2.5 1.9 2.1 0.7 2.4 1.6 1.6 1.0 5.8 4.0 2.7 1.6

63.6 63.8 69.8 66.6

23.0 15.5 15.0 14.8 10.4 6.4 4.7 6.1

From country From abroad

Q 12. Which of the following describes best your income sources from 2009/2008/2007/2006?

Significant differences between 2009 and 2008(confidence level of 95%) Significant differences between 2008 and 2007 (confidence level of 95%)

The percentage of salary/pension out of total income

11

Jan. 2007

Jan. 2008

Jan. 2009

Jan. 2010

100% - total income 70.6 between 50% and 100% 65.2 78.4 55.8

27.1 50% or less 17.2 12.2

N*=843
The percent of salary or pension from overall income - Mean

21.0 12.0 9.6

N*=822 91.28

13.7

17.1

N*=758 86.73

N*=763 82.93

88.16

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account) *Persons who have a salary or pension from the base activities
Q 13. Approximately, what percent is your salary/pension from the total personal income?

Significant differences between 2010 and 2009(confidence level of 95%) Significant differences between 2009 and 2008 (confidence level of 95%)

Evolution of purchasing power

12

Jan. 2007

Jan. 2008

Jan. 2009

Jan. 2010

5.9 I manage to get everything I need, without making any restraints I manage to buy expensive goods, but with restraints from other things I have a decent living, but I can't afford buying expensive goods It is only enough for my basic needs It is not enough, not even for my basic needs 28.1 18.9

4.6 14.5

5.9 11.4

4.0 12.4

30.3

35.5

30.8

29.4

35.3 30.4

34.8

16.8

15.1

16.7

19.4

N=1000

N=1002

N=1003

N=1000

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account)
Q 3. How do you rate your present income?

Significant differences between 2010 and 2009(confidence level of 95%) Significant differences between 2009 and 2008 (confidence level of 95%)

Monthly net income per family member evolution

13

Jan. 2007

Jan. 2008

Jan. 2009

Jan. 2010

14.0 More than 300 EUR 14.2

23.4

17.2

20.9

19.8 200-300 EUR 35.2 38.4 100-200 EUR 34.0 21.8

16.3

35.9

Less than 100 EUR

36.6 20.8

24.7

26.9

N=1000

N=1002

N=1003

N=1000
1EUR 2010=4.2 RON 1EUR 2009=4 RON 1EUR 2008=3,4 RON

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account)
D 9. In which category is your monthly net income per family member included?

Significant differences between 2010 and 2009(confidence level of 95%) Significant differences between 2009 and 2008 (confidence level of 95%)

Disposable income evolution

14

Jan. 2007

Jan. 2008

Jan. 2009

Jan. 2010

13.7 50% or more 18.7 Between 21% and 50% 12.6 Between 11% and 20% 25.2 Between 1% and 10% 29.8

12.7

12.9 16.8 13.6

11.6 17.2 15.2

21.5

18.8 32.7 27.8 31.1

Nothing - 0%

19.2

24.0

24.9

N=1000
Percentage of incomes after deducting the current monthly expenses Mean

N=1002 20.23

N=1003 17.99

N=1000 17.46

18.65

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account)
Q 19. Aproximately, what percent from incomes remains you other costs, investments or savings, after paying the current monthly expenses?

Significant differences between 2009 and 2008 (confidence level of 95%)

15

Partea 2: Perspectives on 2010

2.1 Contracting credits 2.2 Installments acquisition of goods 2.3 Investments

2.4 Buying behavior

2.5 Way of spending holidays 2.6 Trends 2.7 Concerns related to 2010 2.8 Entrepreneurship

Contracting credits

16

Contracted in 2008
N=1003 %

Contracted in 2009
N=1000

Intention of contracting in 2009

N=1003 %

Intention of contracting in 2010

N=1000

No 69.4 77.5

85.4

89.0

Yes

30.6

22.5

14.6

11.0

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account)
Q 5. Have you personally contracted a bank loan in 20092008? Q5.2. In the next 12 months, do you intend to contract a loan?

Significant differences between 2009 and 2008(confidence level of 95%)

Acquisition of goods in installments

17

Purchased in 2008
N=1003 %

Purchased in 2009
N=1000

Intention of aquisition 2009

N=1003 %

Intention of aquisition 2010

N=1000

No 83.0
80.8

88.4

85.4

Yes 17.0 11.6

19.2 14.6

Q 6. Have you personally purchased in installments various goods in 2009/ 2008? Q 6.1. Do you personally intend to purchase in installments various goods in 2010/ 2009?

Significant differences between 2009 and 2008(confidence level of 95%)

Investments
N=1000 (2010)
N=1003 (2009)
2010 2009

18

Realized
%

Intention of realization
%

I made a deposit with a private pension fund I opened a deposit in lei

13.0 14.9 13.0 10.6 7.4 8.2 4.5 3.3 3.3 2.2 1.3 0.8 0.7 2.3 69.5 68.8

18.3 13.8 16.6 10.5 15.4 10.9 6.0 3.9 8.5 3.8 4.0 1.2 1.0 2.1 59.2 66.9

I made real estate investments

I opened a foreign currency deposit

I made a deposit with an investments fund

I bought stock market shares or bonds

Other activity

None of these

Q 9.Which of the following activities in terms of investments have you made in 2009/2008? Q 9.1. Which of the following activities in terms of investments do you intend to make in 2010/2009?

Significant differences between 2009 and 2008(confidence level of 95%)

Buying behavior in 2010 vs 2009

19

2009 %
Something else 2.3

2010
1.3

No, I will not change my buying habits I will buy cheaper brands I will buy the brands that I got used to, but in smaller quantities

51.9

51.7

21.7

23.4

24.1

23.6

N=1003

N=1000

Q 20. Thinking of your purchasing behavior in 2010/2009 compared with 2009/2008, what do you think is most likely to happen?

Ways of spending the holidays (vacation)

2010 2009

20

N(2010)=659 N(2009)=709 Employees Holiday

%

Intention of holiday
%

You have made a trip abroad for which you have paid the accommodation services

16.0 31.0

You will make a trip abroad for which you will pay the accommodation services

30.9 30.3

You have made a trip inside the country for which you have paid the accommodation services

29.7 17.6

You will make a trip inside the country for which you will pay the accommodation services

45.8 47.1

Normalized data (i.e.: the respondents who answered Dont know/No answer" are not taken into account)
Q 15. Please think at your vacation from 2008 and tell me if you made any of the following activities? Q 15.1. Please tell me if you intend to do any of the following activities in your vacation in 2009?

Significant differences between 2009 and 2008(confidence level of 95%)

Trends for 2010

N=1000
You will attend courses, professional trainings You will talk on the phone Youll use instant messaging services, such as Messenger, GTalk, chat You will go to the cinema, theatre, concerts You will watch movies on DVD or PC You will use credit card or debit card for purchasing goods or for paying of services You will read printed newspapers/magazines You will use your personal vehicle Youll play on PC Youll watch TV You will go out in bars, clubs, restaurants You will go to church You will read books You will read newspapers/magazines on the Internet

21
T2B* %
30
17 17 17 13 12 11 11

** %

4 4 3 1 1 13 14 15 12

25

43 64 63 43 58 49 63 63 47 66 46 29 62 49 59
More than in 2009 Much less than in 2009

19 15 15 27 21 27 22 21 31 20 16

8 5 6 14 8 13 5 5 13 4

2.2

-2.3
-3.6 -23.5 -16.3 -28.5 -16.2 -15.9 -34.0 -14.9 -35.4

1 11 2 1 9 9

10
9 9 31 26 15

2 8 2 8 2 8 8 4 2 13 22 23

6 2 20 19 5 6

23.1 1.0 -10.4

Much more than in 2009

*Top 2 Boxes: Much more + more

Same as in 2009

Less than in 2009

** : Difference between % much more than + more and % much less than + less
Q 21. Now I will read to you a list of activities. Please tell me to what extent do you intend to conduct them in 2010 in comparison with 2009. You have the following options: much less, less, the same, more or much more.

Significant differences between 2009 and 2008(confidence level of 95%)

Concerns related to 2010

N=1000 T2B* %
Price escalation 83

23

49

34

14

Personal incomes increase

70

42

28

21

Appearance of an epidemic

62

32

30

25

14

Climatic change

56

24

32

31

13

Losing the job

52**

34

18

22

27

Terrorism

46

26

20

24

30

The outbreak of a war in the region

42

26

16

21

38

To a great extend
**Base=737 (Persons who have income sources the salary or incomes from own busienss) * Top 2 Boxes = To a great extend + To the same extend

To the same extend

To a little extend

Not at all

Q 22. Next I will read you a few phenomena. Thinking at the yea r 2010, Please tell me to what extend worries you each of these.

25

Demographic Profile

Responents demographic profile

Total N=1000

26

Age
16.1% 16.1%

Sex

22.7%

23.6%

48.3%

51.7%

21.4% 18 - 24 y.o. 25 - 34 y.o. 35 - 44 y.o. 45 - 54 y.o. 55 - 65 y.o. Female Male

Responents demographic profile

Total N=1000

27

Occupation

Education
6.3% 31.8% 18.3%

13.7%

8.6% 21.3%

13.3%

7.1% 18.8% 17.1%

7.3% 36.3%
8 grades or less 10 grades/ Vocational school High school Post high school College/ University

Manager/ director (top or middle management) Professional Employee with medium education Non-manual worker / clerk Pupil / Student Retired Other

Responents demographic profile

Total N=1000

28

Marital Status
10.7% 27.0%

Household Members
14.2% 7.3% 24.5% 24.3%

62.3%
Unmarried Married/ living with a partner Divorced /Widow

29.7%
1 member 2 members 3 members 4 members 5 members or more

Responents demographic profile

Total N=1000

29

Personal monthly net income (EUR)

2.1% 6.5%

Monthly net income per family member (EUR)

7.9% 19.2%

24.7%

36.8%

32.7%

15.0%
21.9%
Less than 100 Euro 100 - 200 Euro 200 - 300 Euro More than 300 Euro Don't know/No answer

33.1%
Less than 100 Euro 100 - 200 Euro 200 - 300 Euro More than 300 Euro Don't know/No answer

1EUR 2010=4.2 RON

Responents demographic profile

Total N=1000

30

Historical region

Urbanization degree

16.4%

17.5%

16.4%

32.4%

20.9% 30.5% 14.8%

23.3%

27.9%
Less than 50,000 loc. 50,000 loc.-200,000 loc. 200,000 loc. or more Bucharest

Moldova Muntenia, Oltenia, Dobrogea Banat, Crisana, Maramures Ardeal Bucharest

31

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