Optimistic Level Declines Especially on
Personal Finance and Job Prospects for the Next 12 Months
HONG KONG, 24 July, 2014 – Hong Kong’s consumer confidence index reported an eight-point decrease over the previous quarter, from 111 to 103 – the biggest regional confidence declines, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
In the latest round of the survey, conducted May 12 – 30, 2014, global consumer confidence increased one index point to 97, following a two-point rise at the start of the year. Within the region, consumer confidence in Hong Kong is higher than that in Taiwan (75) and Singapore (98), but lower than in China (111). Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
Drivers of Consumer Confidence
According to Nielsen’s findings, optimistic level for the key index drivers – job prospects, state of personal finance and readiness to spend, all recorded a decline in this quarter. Specifically, positive outlook on personal finance decreased most significantly, from 65% to 54% this quarter. Consumers are also getting less positive on job prospects, resulting a 9-percentage-point decrease from 63% to 54%. Consumers’ intention to spend for the next 12 months is decreased as a result, from 53% to 47% this quarter.
“Retail sales figures reported by the government showed a decline of 4.1 percent in May over a year earlier, reflecting economic uncertainty is still an underlying concern.” said Eva Leung, Managing Director, Nielsen Hong Kong and Macau. “A slowdown in mainland visitors, believed to be related to tightened control, is likely affecting the sales decline. Consumers are more concerned about job security, which is reflected in a job outlook decline of 9 percentage points in the latest Nielsen consumer confidence results.”
When comparing to the same quarter last year, discretionary spending intentions among Hong Kong consumers decreased across all categories measured, with the biggest declines for out-of-home entertainment (36%) and holidays/ vacations (23%), which dropped 6 percentage points accordingly. Putting spare cash into savings is still the favourite choice for most Hong Kong consumers, with 70% in this quarter.
What are consumers concerned about?
Consumers’ concerns over the economy continue to be the top of the list (16%), with 1 percentage point increase compared to the first quarter. Concern on job security is slightly increased 1 percentage point to 12%. “Hong Kong GDP growth was revised to a slower 2.5% in the first quarter, as merchandise exports decelerated markedly,” Leung commented. “Together with the slowdown in growth rate in mainland visitors, consumers are getting more concern on the economic performance which may have a direct effect on their job security level.”
On the other hand, Hong Kong respondents indicate a greater concern regarding political stability (8%) compared to the first quarter. “A number of uncertainties remain in Hong Kong, such as the different attitudes towards Occupy Central and protests. All these factors contributed to consumer doubts about Hong Kong’s future financial and political stability.” Leung concluded.