Discretionary Spending Intentions decreased across Key Categories
HONG KONG, 28 May, 2015 – Hong Kong started with a consumer confidence index score of 106 — an one point decrease from fourth-quarter 2014, according to the Nielsen Global Survey of Consumer Confidence and Spending Intentions. The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions, surveying more than 30,000 respondents with Internet access in 60 countries.
In the latest round of the survey, conducted February 23 – March 13, 2015, global consumer confidence recorded an increase of one index point from the previous quarter to a score of 97. Within the region, consumer confidence in Hong Kong is higher than that in Taiwan (88) and Singapore (100), and same as China (106). Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
Drivers of Consumer Confidence
Nielsen found that Hong Kong consumers are feeling more optimistic about the state of their personal finance (60%) and job prospects (58%).However, optimism towards spending intentions recorded a drop this quarter, from 53% to 52%.
“The labour market in the first quarter remained broadly stable,” said Eva Leung, Managing Director, Nielsen Hong Kong and Macau. “Consumption sentiment was a bit unsteady at the beginning of the year, but the stable income and job conditions, plus the generally upward stock market performance continued to provide support.”
When comparing to the last quarter in 2014, discretionary spending intentions among Hong Kong consumers decreased across all categories measured, with the biggest drop in out of home entertainment (35%), which dropped by 5 percentage points. However, in lieu of Lunar New Year, holiday consumers showed more positive in vacations (31%). Stock market performance stimulated consumers to invest (40%). Putting cash into savings is still the favourite choice for most Hong Kong consumers, with 69% in this quarter.
What are consumers concerned about?
Concern over political stability (14%) and the local economy (14%) were still top of the list. However, compared to the last quarter, the level of concern among these two decreased. Consumers are keeping an eye on the latest discussions on universal suffrage and external demand was still lacklustre being dragged down by the slowdown in inbound tourism, causing the high concern in Hong Kong economy. It is worth to note how domestic demand and inbound tourism would fare down the road amidst the various uncertainties on the external front in the next quarter.