Bookmark & Share
(SINGAPORE) Consumer confidence in Singapore is climbing out of a deep slump. The Asian Consumer Confidence Index by InsightAsia shows Singapore's index increased from 62 in the first quarter of this year to 88 in Q2.
The index is still below the neutral point of 100 but consumers feel less negative about economic conditions than they did in Q1.
The quarterly survey is conducted in multiple Asian countries by InsightAsia, a market research agency that specialises in the Asia-Pacific region.
The attitude towards the state of the economy has become less negative. In Q1, 87 per cent of consumer respondents felt the economy was worse than the year before. In Q2, this proportion dropped to 53 per cent. The outlook on the economy has also improved. The proportion of respondents optimistic about developments in the next year increased from 21 per cent to 36 per cent quarter on quarter.
Likewise, consumers have become more positive about their current and future financial well-being. Slightly negative sentiment in Q1 changed to a neutral attitude in Q2.
Willingness to buy durable consumer goods has also increased, though the general feeling still is that it is still a bad time to buy major household items.
The increased consumer confidence in Singapore is matched by government reports that indicate that gross domestic product (GDP) is recovering after a shocking Q1. The Singapore economy grew 20 per cent from Q1 to Q2.
But despite these signs of recovery, the recession is not over and GDP is still lower than it was in 2008. Based on Q2 figures, the 2009 forecast by the Ministry of Trade and Industry was adjusted from a 6-9 per cent decline to a 4-6 per cent decline versus 2008.
Consumers seem to be aware that the recession is not over yet, as they expect unemployment to rise over the next year. Many Singaporeans are insecure about their job and increasing their income. Consumer confidence is increasing, but is still below the neutral level.
The InsightAsia survey also provides a regional perspective that shows Singapore is not the only country in Asia where consumer confidence is increasing. InsightAsia also reports positive developments for Malaysia, Indonesia and Thailand - though not as strong as the increase in Singapore. Sentiment in Singapore was more negative than in these other countries in Q1, so the strong increase in Q2 closes that gap.
The Consumer Confidence Index of Singapore (88) is now above Thailand (78) and below Indonesia (97) and Malaysia (94).
Thailand achieved the smallest growth in consumer confidence in Q2. The country is not only burdened by the global recession but also affected by political instability.
Chinese consumers are in a different state of mind. Their Consumer Confidence Index is higher at 123. China's economy is expected to grow 6-7 per cent in 2009 despite the global slowdown, according to the International Monetary Fund. China is the only of the five countries in InsightAsia's survey where consumers feel it is a good time to buy major household items.
The increasing consumer confidence in South-east Asia is a good sign for the region's economy. Exports to other parts of the world are low and so far the recovery of the Asian economies has been driven mainly by demand in the region.
Asian consumer confidence is an important indicator of this regional demand, so the results of the Q2 survey are encouraging.
The writer is head of Consumer Confidence Index at InsightAsia Research Group. For more information about the report, he can be contacted at
The Q2 measurement took place in the last two weeks of June. InsightAsia surveys consumers regarding the economy and their financial well-being. The Consumer Confidence Index is based on consumers' opinions about:
 |
Search Property News
