Consumer confidence index in Hong Kong remained at 106 in Q3 2013, just one point lower than Q2 2013, and an increase of seventeen points from Q3 2012, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
“Economic uncertainty as a result of United States Quantitative Easing Monetary Policy and the frozen property market contribute a modest downward movement on the consumer confidence level,” said Eva Leung, Managing Director, Nielsen Hong Kong & Macau. “While the index is holding steady in Hong Kong, consumers’ intentions to spend on discretionary indulgences are still optimistic.”
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns and spending intentions among more than 30,000 respondents with Internet access in 60 countries. The latest round of the survey was conducted between August 14 and September 6, 2013. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. Sample size for Hong Kong Consumer Confidence Index is 501, compiling from a mixed methodology survey.
Drivers of Consumer Confidence
At 106 points this quarter, Hong Kong consumer confidence slightly decreased one index point comparing to Q2. It remained high compared to other places such as Singapore (98) and Taiwan (76), but lower than China (110). The global average of consumer confidence level was 94.
According to Nielsen’s survey, Hong Kong consumers reported a drop in optimism for job prospects, from 58 to 53 percent, and for personal finance, drop from 61 to 59 percent. While respondents were cautious about future job prospects and personal finance, their intention to spend were still remained unchanged.
What are consumers concerned about?
Hong Kong consumers’ concerns over the economy continue to be the top of the list (18%), with a 1 point increase comparing to Q2. Respondents were also getting more cautious about future job security (11%). “The rise of job security was partly caused by the large amount of fresh graduates seeking for jobs in the market after summer holiday.” Leung commented. “This can also explain why there was a decline on the job prospects outlook.”
On the other hand, respondents seem to be getting less concern on food prices, a 4-point decrease comparing to Q2. According to Census and Statistics Department, the year-on-year increase in the Composite Consumer Price Index in September was 4.2%, a 1-point decrease comparing to August.(1) “Hong Kong food supply depends largely on mainland. With a success in inflation control by the Chinese Government consumers may see this represents a more stable food prices.” Leung commented.
Savings still on the Minds of Many
According to Nielsen’s survey, saving for rainy days continued to be the top priority for Hong Kong consumers, with more than three-quarters (76%) claiming to put their spare cash into savings. This is followed by investing in shares of stock/mutual funds (46%) and out-of-home entertainment (42%).
Comparing to the pre-recession level on 2008, saving for retirement was still the most pronounced. While consumers’ discretionary spending is still remained high, there is also a significant increase on retirement fund investment (29%) as comparing to Q2. “The lowered on MPF funds administration fees as a result of severe market competition caught some attentions in the market, which in the end stimulated some movement on workers’ contributions side.” Leung concluded.
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between August 14 and September 6, 2013, 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 their Internet users, is weighted to be representative of Internet consumers, and has a maximum margin of error of ±0.6%. This Nielsen survey is based on the behavior of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60-percent Internet penetration or 10M online population for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.