Hong Kong’s consumer confidence index increased six points in Q1 to 111 — the highest score since 2008, 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 February 17 – March 7, 2014, global consumer confidence returned to pre-recession levels with an index score of 96 in the first quarter of 2014—the highest score since Q1 2007. Hong Kong’s consumer confidence score is 15 points higher than the global average. Within the region, consumer confidence in Hong Kong is higher than that in Singapore (99) and Taiwan (76), and even with China (111).
Drivers of Consumer Confidence
Positive perceptions about local job prospects over the next 12 months increased in the first quarter in Hong Kong. Two-out-of-three respondents (63%) believed the job market would be good or excellent in the upcoming year, a quarterly increase of 6 points.
According to Nielsen’s survey, 65 percent of respondents reported a better outlook on their personal finances over the next 12 months, a 6-point increase compared to last quarter. Spending intentions of Hong Kong respondents also increased, up 3 points to 53 percent.
“Hong Kong remained a state of full employment market, according to the latest unemployment rate in the first quarter,” said Eva Leung, Managing Director, Nielsen Hong Kong and Macau. “The positive forecast on salary adjustment, which is higher than the forecasted inflation rate, reflected that Hong Kong consumers will have a better purchasing power outlook.”
Investment and Discretionary Spending Rise
Preparing for one’s financial future by means of savings is still the favorite for most Hong Kong consumers: 71 percent in the first quarter. However, when comparing to same quarter last year, there is a 4-point decrease on putting money into savings. Instead, Hong Kongers tend to ensure financial security by investing in shares of stock or mutual funds (up to 46% from 43%) or retirement fund (up to 22% from 20%).
Discretionary spending intentions increased for all categories measured in the first quarter, such as buying new clothes (up to 28% from 24% in Q4 2013), spend on holidays or vacations (30% from 28% in Q4 2013), or buying new technology products (23% from 21% in Q4 2013).
What are consumers concerned about?
Hong Kong consumers’ concerns over the economy continue to be the top of the list (15%), but with 5 points decrease compared to same quarter last year. Concern on food prices is declining from 15 percent in Q1 2013 to 10 percent in Q1.“Optimism towards local economy grew as a result of positive Gross Domestic Product forecast for the year 2014, together with a stable food price index,” Leung commented. “With a more positive outlook, consumers in Hong Kong turn to seek for a better work-life balance.”
On the other hand, Hong Kong respondents indicate a greater concern regarding health (13%) and job security (11%) compared to Q1 2013. “A number of uncertainties remain in Hong Kong, such as the declining mainland travelers figures during the Golden Week, constant news on SARS outbreak in the Middle East and H5N6 in Sichuan. All these factors contributed to consumer doubts about Hong Kong’s future financial and economic stability.”
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted February 17 – March 7, 2014, and polled more than 30,000 online consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. Sample size for Hong Kong Consumer Confidence Index is 501.
The sample has quotas based on age and sex for each country based on its 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 only on the behavior of respondents with online access. 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 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.