Malaysian Consumers Cautiously Optimistic In Q1 2018
- Malaysia’s consumer confidence surpasses the 100 point mark for the first time since Q3 2013
- The economy, job security and work-life balance are top concerns among Malaysians
- They are more positive on personal finances and job prospects compared to Q4 2017
The Malaysia consumer confidence index has improved in the first quarter of 2018 to 104 percentage points (pp), up 10 points from the previous quarter, according to The Conference Board Global Consumer Confidence Survey, in collaboration with Nielsen (formerly known as the Nielsen Global Survey of Consumer Confidence and Spending Intentions report).
This is the first time since Q3 2013 that the country’s confidence score has surpassed the 100 point mark, which indicates a level of cautious optimism among Malaysian consumers. This increase in consumer confidence has propelled Malaysia to become the 15th most confident country globally in the quarter – a marked improvement compared to its 30th placing last quarter.
“The significant increase in consumer confidence in Malaysia in the first quarter of 2018 spells good news for retailers and manufacturers, as consumers appear more positive about their job prospects and personal finances,” said Raphael Pereda, Nielsen Malaysia’s Managing Director.
Indeed, more than half of the respondents are positive on the state of their finances, with 63% saying that they expect their personal finances to be either good or excellent in the next 12 months (+11% compared to last quarter). Fifty six percent of respondents also expressed their confidence in the local employment outlook over the next 12 months (+9% vs. Q4 2017).
THE ECONOMY REMAINS MALAYSIANS’ TOP CONCERN
Malaysian consumers continue to rank the nation’s economy (44%, -2% vs. Q4 2017) as their top concern, while job security (22%, no change vs. Q4 2017) and work-life balance (16%, -1%) place second and third, respectively.
Recessionary sentiment among Malaysians has decreased for a second quarter in a row; fewer Malaysians believe that the country is experiencing a recession compared to last quarter (72%, down 8% compared to 80% in Q4 2017). This improvement corresponds with other positive economic indicators in Malaysia such as GDP growth and positive FMCG growth.
“The good news is that one in three respondents believes that the country will be out of a recession in the coming 12 months,” Pereda said. “Consumer confidence and spending intentions should also continue to rise following recent government initiatives to “zerorize” GST and fix fuel prices, which are viewed as being good for consumers.”
SOUTH EAST ASIAN CONSUMERS AMONG THE MOST CONFIDENT IN THE WORLD
Consumers from the Philippines (2nd place), Indonesia (3rd place), Vietnam (4th place) and Thailand (8th place) rank among the 10 most confident in the world in Q1 2018. South East Asians are once again the world’s most avid savers in the quarter – Vietnamese consumers maintained their lead as the most likely in the world to save spare cash (73%), followed by consumers from the Philippines in third place (68%) and Thais (67%) placing fifth.
Consumers in Indonesia, Malaysia and Singapore are tied at 7th place (65%) when it comes to saving spare cash after covering essential living expenses. Globally, an average of 52% of consumers say that they save extra cash that they have after spending on essential living expenses (unchanged from last three quarters).
Forty one percent of Malaysian consumers also say that they spend their spare cash on holidays or vacations – down 1% compared to respondents in Q4 2017, while 37% say they use the money to pay off their debts or loans (unchanged from the previous 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 (vs. 88% in Q4 2017), with 56% of respondents spending less on new clothes (vs. 61% in Q4 2017), 51% switching to cheaper grocery brands (vs. 46%) and 50% cutting down on out-of-home entertainment (vs. 56%). (See Chart 5).
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.