Jakarta, 20 February 2019– The Conference Board® GlobalConsumer Confidence ™ Survey, in collaboration with Nielsen, recently released the results of its study which showed that the Global Consumer Confidence Index increased one point to 107 in Q4 2018, the highest number in 14 years. Indonesia is still one of the three most optimistic countries in the world.
Indonesian consumers’ level of optimism in Q4 2018 was stable, with the Consumer Confidence Index (CCI) of 127, which increased 1 point compared with the previous quarter of 126. Indonesia ranks third as the most optimistic country globally after India (133) which has increased by 3 points and Philippines (131) which has significantly increased 5 points.
CCI in Asia-Pacific increased 3 points to 117. Major markets such as China, India, Indonesia and Japan all improved. Confidence in China remains quite high, though recent retail spending data showed a possible softening. In Indonesia, consumer confidence is stable and is likely to hold up amid the upcoming national elections.
CCI is formed by three indicators, i.e. optimism toward (1) Local Job Prospects, (2) State of Personal Finances, and (3) Spending Intentions; all in the next 12 months. For Indonesia, the optimism for Local Job Prospects decreased from 73% in the third quarter of 2018 to 68% in Q4 2018. Meanwhile, optimism of the State of Personal Finances was stable with 79% in the last two quarters of last year. The good news is, in the fourth quarter of 2018, 63% of consumers said that the next 12 months is A Good Time for Them to Shop for The Things They Want and Need. This last indicator increased significantly from 57% in Q3 2018.
Even though The Economy remained in the top list of consumers’ major concerns, in Q4 2018 the percentage slightly decreased (30%) compared to the previous quarter (32%). In this quarter Indonesian consumers’ perception towards economic recession was also more positive, with only 57% of respondents thought that the country is in an economic recession. The percentage significantly decreased from the previous quarter which was 61%. “In general, in Q4 last year consumers were quite confident with their state of personal finances and they were also ready to spend. Most probably this is influenced by the year end holidays period where most of the consumers celebrate the end of the year.” said Agus Nurudin, Managing Director, Nielsen Indonesia. “The year end spirit seemed to bring positive feelings to consumers toward the economic condition.” Agus concluded.
Approaching the political year and presidential election in 2019, 24% consumers expressed their concern about Political Stability, slightly higher compared to the previous quarter of 22%. The concerns of Work/Life Balance and Tolerance Towards Different Religions were 17% and 15% respectively; while 13% consumers have concern on Parents’ Welfare and Happiness.
In terms of allocating spare cash, 68% of consumers chose to allocate their spare cash for Savings, 47 percent chose to use it for Holidays/Vacation, 42 percent chose to Invest in Shares or Mutual Funds. Meanwhile, 34% of consumers chose to use their spare cash for Out-of-Home Entertainment (34%) and 29% use it for Home Improvements.
With regards to savings on household expenses, in this quarter more than half (59%) Indonesian online consumers chose to Cut Down on Out-of-Home Entertainment, followed by consumers who chose to Spend Less on New Clothes (43%) and Cut Down on Holidays/Short Breaks (39%).The Conference Board Global Consumer Confidence Survey, in collaboration with Nielsen, measures perceptions of local job prospects, personal finances and immediate spending intentions among more than 32,000 respondents with Internet access in 64 countries, including 501 respondents from Singapore. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
ABOUT THE CONFERENCE BOARD® GLOBAL CONSUMER CONFIDENCE SURVEY
The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen. It was conducted in November 2018 and polled more than 32,000 online consumers in 64 countries throughout Asia-Pacific, Europe, Latin America, the Middle East/Africa and North America. The sample includes internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. This survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country.
The Conference Board uses a minimum reporting standard of 60% internet penetration or an online population of 10 million for survey inclusion. The Nielsen China Consumer Confidence Index is sourced from a separate survey conducted by Nielsen China, which is based on a mixed methodology survey of more than 3,000 respondents in China. The Global Consumer Confidence Survey was established in 2005.
Download The Conference Board Global Consumer Confidence Report here.