- Malaysia’s consumers the seventh most confident in the world
- At 117 points, consumer confidence is the highest since turn of the decade
- The economy, job security and debt are top concerns
The Malaysia consumer confidence index continued its surge in the second quarter of 2018 to 117 percentage points (pp), up 13 points from the previous quarter and up 23 points versus Q2 2017, according to The Conference Board Global Consumer Confidence Survey, in collaboration with Nielsen.
This is the highest recorded confidence score in Malaysia since the turn of the decade, which can be attributed to post-election optimism, as well as the ‘zeroristion’ of the goods and services tax (GST) on 1 June 2018. The high score propelled Malaysia to become the seventh most confident country in the quarter, up eight spots from the previous quarter.
“In the weeks following the election, there has been a sense of optimism, amplified by the government’s move to stabilise the price of fuel and withdraw the GST,” says Raphael Pereda, Managing Director of Nielsen Malaysia. “The overall positive sentiment has translated into significant year-on-year improvements in recessionary sentiment, economic outlook and job prospects.”
Approximately two thirds (65%) of Malaysians believe the country is currently experiencing a recession (a significant decrease compared to 72% in Q1 2018 and 83% in Q2 2017). Of this, more than half (57%) expressed confidence that Malaysia will recover from the recession in the next 12 months – significantly more optimistic compared to 32% in Q1 2018 and 25% in Q2 2017.
ECONOMY, JOB PROSPECTS AND DEBT ARE TOP CONCERNS
While concerns about the economy have reduced compared to a year ago (40% vs 47% in Q2 2017), it still remains the top worry among consumers. However, there appears to be a year-on-year rise in concerns about job security (26% vs 22% in Q2 2017) and debt (23% vs 15% in Q2 2017).
“While Malaysians see a bright future ahead of them, they are still grounded in reality and continue to express concerns on bread and butter issues,” says Pereda. “However, levels of optimism are significantly higher than they were a year ago”.
Indeed, a majority of Malaysians believe that the state of their personal finances (69%) and their job prospects (73%) in the next 12 months will be excellent or good – a significant improvement compared to 52% and 44%, respectively, in Q2 2017.
ASIAN CONSUMERS SAVE SPARE CASH; MALAYSIANS ALSO SPEND ON HOLIDAYS
Asian consumers are the world’s most avid savers in the quarter – Hong Kong (72%) and the Philippines (71%) edged out Vietnam (70%) as the top two countries where consumers are most likely to save their spare cash. Singapore (69%), Indonesia (66%), India (65%), Taiwan (65%), China (64%), Malaysia (64%) and Thailand (64%) rounded up the world’s top 10 savers. Globally, an average of 53% of consumers says that they save extra cash that they have after spending on essential living expenses.
Forty three percent of Malaysian consumers also say that they spend their spare cash on holidays or vacations – up 2% compared to respondents in Q1 2018; the same percentage also intend to use the money to pay off their debts (up 6% from last quarter).
When asked if they have changed their spending habits in the last 12 months to save on household expenses, 84% of Malaysian consumers said yes (unchanged from the previous quarter), with 54% of respondents spending less on new clothes (vs. 56% in Q1 2018), 50% cutting down on out-of-home entertainment (unchanged from the previous quarter) and 47% switching to cheaper grocery brands (vs. 51% in Q1 2018).
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. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.