The Malaysian consumer confidence remain stable in the third quarter of 2017 with an index score of 93 percentage points (pp) – down one point compared to Q2 2017. Results from the latest Global Survey of Consumer Confidence and Spending Intentions also revealed that confidence levels across Southeast Asia continues to hold strong with four out of six countries in the region retaining their top 10 spot globally.
Consumers in the Philippines are the second most confident globally (131 pp, +1 from Q2 2017) followed by Indonesia in third place (127 pp, +6). Vietnam retained its fifth position from previous quarter (116 pp, -1) while Thailand inched up a spot to be the ninth most confident country globally (113 pp, +6). Singapore improved its ranking by two spots at 29th place as compared to last quarter (99 pp, +5). The average global consumer confidence is 105 pp (+1 vs. Q2 2017).
“The consumer confidence level for Malaysia remains on par with that of the second quarter this year, below the neutral threshold, but still remaining at its highest level for over two years,” said Raphael Pereda, Managing Director, Nielsen Malaysia. “The higher trend in sentiment observed over the last couple of quarters, coupled with the continued improvement in key economic indicators has also led to the first quarter of growth in FMCG this year.”
THE ECONOMY & JOB SECURITY REMAIN MALAYSIAN’S TOP KEY CONCERN
Malaysian consumers continue to rank the nation’s fiscal status (44%, -3% vs Q2 2017) and job security (21%, -1%) as their top two key concerns whilst 17% of the survey respondents also list debt as the third most worrisome (17%, -1%).
Despite positive economic indicators, recessionary sentiments among Malaysians continue to remain high (80%). However, at least one in four respondents are feeling positive that the country will be out of an economic recession in the coming 12 months (27%, compared to 25% in Q2 2017).
Malaysian consumers also continue to remain upbeat on their state of personal finances with 56% perceiving that their state of personal finances to be either good or excellent in the next 12 months (+4% compared to last quarter). 45% of the respondents also feel confident about the local employment outlook over the next 12 months (+1% vs. prior quarter).
Other key areas of concern that recorded a slight increase compared to the last quarter include work/life balance (17%, up 2% from last quarter), health (13%, unchanged) and increasing fuel prices (12%, up 4%).
“The Malaysian economy continued to show strong signs of positive growth with GDP of 6.2% in Q3 2017, yet the number one concern for Malaysian consumers remains with the economy. Many still believe they are in a recession, further highlighting that the trickle effect of the improving economy is yet to fully take effect,” notes Pereda. “Despite the fact that none of the economic KPIs indicate that the country is in a recession, consumers continue to believe that the current situation and the future for the country is not positive.”
SOUTHEAST ASIAN CONSUMERS LEAD GLOBALLY WHEN IT COMES TO SAVING INTENTIONS
Globally, Southeast Asian consumers retain their lead when it comes to saving intentions. Filipinos are the world’s most avid savers (69%) followed by Indonesians and Thais (68%), tied in second place. Consumers in Singapore (67%, 4th), Vietnam (66%, 6th) and Malaysia (63%, 7th) are all ranked within the list of top 10 when it comes to saving any spare cash after covering essential living expense. The global average of consumers depositing spare cash into savings is 52% (unchanged from last quarter).
Besides prioritising saving intentions, nearly one quarter of Malaysian consumers have also said that they would divert any spare cash towards investment of stocks/mutual funds (28% vs. 32% in last quarter) and paying medical insurance premiums (22% vs. 25% in prior quarter) while at least two in five intend to pay off debts, credit cards or loans (43% vs. 42% in Q2 2017).
Whilst saving intentions are high among Malaysian consumers, the survey also revealed that Malaysians are ready to spend on holidays/vacations (41%, +1% from last quarter) and new technology products (20%, +1%).
Nearly nine in 10 respondents have said that they have changed their spending habits to improve household savings in the past 12 months (87%, +3% from Q2 2017) – this includes spending less on new clothes (63%, +6%), cut down on out-of-home entertainment (58%, +2%) and switching to cheaper grocery brands (52%, +5%). Nevertheless, should economic conditions do improve, at least one-third of Malaysian consumers are expected to continue to save on gas and electricity (34%) and spending less on new clothes (33%).
“Whilst many Malaysians wants to save for a rainy day, they are generally doing so at the expense of an interest rate which is lower than inflation. Consumers could start spending again but if they do so without first paying off higher interest rate, then they are simply repeating the cycle of spending and increased debt.” observed Pereda.
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted 13 – 22 September 2017. The findings in this survey are based on an online methodology in 63 countries. In Malaysia, the sample size is 501. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only on the habits of existing internet users, not total populations. In developing markets where online penetration is still growing, audiences may be younger and more affluent than the general population of that country. Three sub-Saharan African countries (Ghana, Kenya and Nigeria) utilize a mobile survey methodology and are not included in the global or Middle East/Africa averages discussed throughout this report. In addition, survey responses are based on claimed behavior, rather than actual metered data. Cultural differences in reporting sentiment are likely factors in the measurement of economic outlook across countries. The reported results do not attempt to control or correct for these differences; therefore, caution should be exercised when comparing across countries and regions, particularly across regional boundaries.