The Malaysian consumer confidence index for Q2 2015 slipped to 89 percentage points (pp) from 94 points in previous quarter, according to the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.
While confidence levels in Southeast Asia remain relatively high, the Philippines was the only market where consumer sentiments increased in the past quarter, gaining seven points to rise to a score of 122. in contrast, Vietnam (104 pp) reported Southeast Asia's biggest quarterly decline in confidence (-8 pp) followed by Malaysia (-5 pp), Indonesia (-3 pp), Thailand (-3 pp) and Singapore (-1 pp). Despite the declines, Indonesia (120 pp), thailand (111 pp), Vietnam (104 pp) including the Philippines, remain among the top 10 most optimistic markets globally. Malaysia fell two spots from previous quarter and is now ranked 24th most confident country globally.
"The dip in consumer confidence for Malaysia is not a surprise with the introduction of Goods and Services Tax in April. This had impacted consumers' perception on the cost of living more than was originally expected. And in turn, this has led to a less optimistic short term outlook for most Malaysians." said Richard Hall, Nielsen Malaysia's Country Manager.
The economy continues to be Malaysian consumer's key concern with 43% of the respondents being worried about the nation's fiscal conditions. 73% of Malaysian consumers believe that the nation is in a recession and this has increased from 67% from previous quarter. About half of the respondents believe that job prospects (53%) and personal finances (48%) are not so good over the next 12 months.
"Despite most economic indicators pointing to the Malaysian economy being healthy and still growing, the Malaysian consumers have a different view with the majority of the people believing that we are in a recession and future prospects being less positive. This will remain the case unless something dramatic happens to change this perception." observes Hall.
Malaysian consumers continue to prioritize their spare cash into savings with about a third of Malaysians investing in stocks and mutual funds (32%) and paying off debts/credit cards or loans (38%) while a quarter of the respondents are stashing the spare cash in the form of retirement funds (24%). Even though Malaysians are actively saving the extra cash, they are not shy about splurging on big ticket items such as vacations (41%) and new technologies (21%).
As general cost of living continues to intensify across the region, nearly nine in 10 Malaysians have changed their spending habits in the past year to increase household savings (86%). In an attempt to reduce household expenses, 64% Malaysians are spending less on new clothes while 57% of respondents are cutting down their out-of-home entertainment.
"The outcome of declinging consumer confidence and economic trepidation is that people will start tightening their belts and they will become more cautious about their spending habits." added Hall.
For more detail and insight, download Nielsen’s Q2 2015 Global Consumer Confidence Report. For a historical look at global consumer confidence by region, country and time period, explore the Nielsen Global Consumer Confidence Trend Tracker.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted May 11-29, 2015 and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.