Pessimism on economy dips, though HK confidence still low

PUBLISHED : Friday, 17 April, 2009, 12:00am
UPDATED : Friday, 17 April, 2009, 12:00am

Pessimism in the city about the economic climate has decreased, although confidence is still low, a City University survey shows.

'People think the worst has passed and it is a good sign that they are getting optimistic,' said Geoffrey Tso Kwok-fai of the university's department of management sciences about the findings.

The consumer confidence index in the first quarter was 78.8 - up 2.6 points from the previous quarter. Scores below 100 indicate no confidence; those above 100 indicate confidence. Respondents were confident only about their living standards, for which the index score was 104.3.

They were least confident about employment: that index slipped to 56.5 from 60.1 in the fourth quarter. The scores on consumer prices, housing purchases, stock investments and economic development were all below 100, though up slightly from the previous quarter. One thousand adults were surveyed.

Hong Kong consumers were less pessimistic than their counterparts in Macau and much less than those in Taiwan, but more pessimistic than those in Beijing, the university said.

Dr Tso said Hongkongers should not be complacent. The lack of confidence on employment could affect other areas of the economy, he said, and it would not improve unless the jobless rate returned to 3 per cent from the current 5 per cent.

'When people are not confident about job security they may cut their spending, which can cause a chain effect,' he said.

He expected the consumer confidence index to rise in the next quarter, but said external factors such as the performance of stock markets on the mainland and in the United States could reverse the trend.

'We are bound to be influenced by other economies,' he said.