21 May 2009
IConsumer confidence in Singapore has plummeted to a record new low in the past six months, falling a significant 12 Index points down from 92 to 80, according to the latest twice-yearly Nielsen Global Consumer Confidence Index which tracks consumer confidence, major concerns and spending habits among 25,420 internet users in 50 countries. This is Singapore’s third consecutive decline from its all time high of 114 recorded in late 2007.
Elsewhere around the world, consumer confidence took a similar beating, reaching its lowest point of 77, down seven Index points from 84 six months ago. In the latest Nielsen Global Consumer Confidence Survey conducted in 19 March – 2 April 2009, the emerging markets of Russia, UAE, and Brazil suffered the biggest falls in consumer confidence over the past six months as currency devaluation, weakening export markets and falling global commodity prices took their toll. While consumer confidence in Europe and developed markets tumbled dramatically between May and October 2008, in recent months the emerging markets of Russia and Latin America have been hit hardest.
Indonesia topped Nielsen’s Global Consumer Confidence Index at 104 points, followed by Denmark (102 points) and India (99 points). The world’s most pessimistic nations in the Nielsen Index are South Korea (31 points), followed by Portugal and Latvia at 48 Index points. Confidence fell in 48 out of 49 countries – Taiwan was the only country to buck the global trend, edging up three Index points from 60 to 63, although still 14 points below the global average.
“Global consumers, and Singaporeans notwithstanding, have been battered and bruised by a constant onslaught of bad news in the last six months,” said Paul Richmond, Managing Director, Consumer Group, The Nielsen Company Malaysia and Singapore. “All over the world, announcements of job cuts and company profit warnings, bankruptcies and foreclosures, lowered GDP expectations, among other negative reports, have combined to hit consumer confidence hard.”
Regionally, Latin America suffered the biggest consumer confidence hit, falling 15 Index points (down to 82 points from 97). Consumer confidence in Asia Pacific and Europe both fell by seven Index points to 78 and 70 respectively, while North America dropped by a further three points to hit 80.
While global consumer confidence plunged to a new low, fears of unemployment and job uncertainty reached new heights. Job security was cited as the leading concern among Internet consumers in 31 of 50 countries surveyed. Global concern for job security rose to 22 percent globally from nine percent in the latest round of the survey. Consumers who cited job security as their top concern in life today include China (29%), Hong Kong (33%), India (29%), Vietnam (36%), Italy (24%), Spain (34%), Hungary (31%) and Mexico (29%). “These numbers reflect the level of increasing concern for a depressed job market in every region. For the first time in this survey, job security has become a top concern in life,” said Mr Richmond.
Singaporeans are displaying similar worries. Job security has overtaken the economy as consumers’ main concern, reflecting a huge, nearly two-fold jump compared to the study conducted six months back. In fact, Singaporeans are now second among global consumers, after the Arabs, who are most concerned about their job security. While only a quarter (26%) of local respondents cited job security as one of their top concerns six months ago, one in two (49%) Singaporeans are now reportedly losing sleep over the prospect. (Charts 2 & 3)
“We are currently seeing the worst decline in Singapore employment in the last six years, and since the commencement of the Nielsen Global Consumer Confidence study,” noted Mr Richmond. “Things are definitely not looking good on the job front, not just in Singapore, but also everywhere else in the world.”
Uncertainty in the labour force also remains a worry for the near future. One in five (26%) global consumers described their job prospects in the next 12 months as bad compared with 17 percent in October 2008. Three-quarters of Asia Pacific consumers are having a skeptical job outlook, with the most pessimistic of the lot coming from the Koreans (95%), Hong Kongers (94%) and Japanese (91%) —where over nine in 10 felt that their local job prospects in the next year were either not so good or bad.
In Singapore, 22 percent and 56 percent respectively think job prospects would be bad and not so good for the next 12 months. These latest figures reflect an increased pessimism towards job prospects since the last survey, amongst three in ten consumers here (29%).
Being the avid savers that they are, this current period of economic uncertainty is providing Singaporeans an even more compelling reason to save, and Singaporeans now make the world’s greatest savers! The intention to save is now seen in three out of four (75%) consumers here—the highest record so far. At 42 percent, holidays/vacations continue to take second priority where it comes to allocation of spare cash.
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