Consumer confidence here hits 2-year low

[Musicwhiz]

The Straits Times
Nov 1, 2011
Consumer confidence here hits 2-year low
Economy, job security and rising food prices are the top worries: Nielsen

By Magdalen Ng

CONSUMER confidence in Singapore has fallen for the second consecutive quarter to a two-year low, amid growing worries of an economic recession.

The Nielsen Global Consumer Confidence Index for Singapore fell nine points to 94 in the three months to September compared to the quarter before.

A number above 100 indicates positive consumer sentiment, while a figure below 100 indicates pessimism.

'Singaporean consumers turned into a more pessimistic group as the prospect of a prolonged global macroeconomic malaise became more pronounced. The continuing inflationary pressures and higher volatility in asset prices also contributed to a higher level of uncertainty among consumers, who are increasingly concerned about how to protect their wealth,' said Ms Grace Liu, head of consumer research at Nielsen Singapore.

The drop means Singapore is now only the 11th most confident country in the Asia-Pacific region, falling behind leaders India, Indonesia and the Philippines.

The number of people here who think that the country is already in an economic recession doubled to 24 per cent in the past three months, from the previous quarter.

The survey was part of the Nielsen Global Online Survey, which polled more than 28,000 consumers in 56 countries throughout the Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.

Perceptions here over job prospects and personal finances also took a beating.

Ms Liu said: 'Consumers turned into a more pessimistic group over the third quarter, driven by uncertainty about the future course of the global economy, concerns over job security and other economic risks.'

The top three concerns are the economy, job security and the increasing food prices. Consumers are also looking to preserve and grow their wealth, and are more restrained on spending.

Two-thirds of people here have indicated that they plan to put spare cash into savings, and 31 per cent of consumers plan to invest in stocks or mutual funds, a considerably higher percentage compared to the global average of 18 per cent.

Ms Liu said that this signals a strong appetite for wealth management products and services, which presents significant opportunities for financial service providers in the country.

This is also not a good time to buy things that they want or need, according to 65 per cent of respondents here. This is a stark increase from the same period last year, where only 48 per cent of consumers felt this way.

Ms Liu added: 'Consumers in Singapore are holding back on their household expenses despite the overall positive economic conditions in the Asia-Pacific. Singapore leads the ranks in Asia when it comes to buying items on sale. Consumers continue to look for ways to stretch their money in a gloomy economy.'

songyuan@sph.com.sg

[Ben]

There is a big difference between the finding in this survey versus what I am seeing. Pay a visit to major shopping malls, be it in central Orchard areas or housing estate, you can see that the crowd is still there. People are still queing outside restaurants, still hard to find a place in food courts during peak hours, supermarkets are still packed, Telcos shops has long queue of people wanting to buy iphone 4s...Housing sales volume is still high, car prices record high....IT shows/Tours exhibition still raked in records turnover....I am not feeling consumers confidence affected much yet by the looming crisis...I would like to think that people are aware of the deterioration of the world economy, but still feel relatively safe here. People are more conscious on spending, but still spend nevertheless. Many people when taking part in such survey will think and behave rationally, but when there is a sales, emotion took over and all logics are thrown out of the window.