Consumer confidence hits 3-year-low
Consumer confidence in Hong Kong dropped to a three-year low in the third quarter amid a gloomy global economic outlook, according to a recent survey.
The city’s confidence index dived 15 points quarter-on-quarter from 104 to 89 points, according to international market research consultancy Nielsen. The lowest level since the second quarter of 2009 when it fell to 79 points, the index contrasted with the global average, which saw a one-point increase to 92 in the third quarter. China’s index was 106, also a one-point quarter-on-quarter increase.
The Nielsen survey, which is conducted every quarter, polls more than 25,000 consumers in more than 50 countries and regions around the world to gauge their economic outlook and confidence in the job market, status of their personal finances and readiness to spend. It is not known how many respondents were from Hong Kong.
Oliver Rust, Nielsen Hong Kong’s managing director, attributed the fall in consumer confidence largely to the lingering Euro debt crisis and the slow recovery of the US economy.
The economic outlook remained the top concern, said 39 per cent of the city’s respondents – 2 percentage points higher than in the previous quarter. The two other major concerns among locals were rising food prices, at 29 per cent, and job security, at 21 per cent.
Only 35 per cent of respondents in Hong Kong said they were optimistic about job prospects, a sharp drop from 50 per cent in the second quarter.
The government is expected to release the GDP figure for the third quarter today, and the unemployment rate from August to October on Monday.
Hong Kong’s real GDP grew by 1.1 per cent in the second quarter compared with a year earlier. But quarter-on-quarter, the economy contracted by 0.1 per cent in the second quarter.
According to the Nielsen survey, some 60 per cent of Hong Kong respondents felt that the city was “in a recession at the moment”, up 19 percentage points from 41 per cent in the previous quarter.
“Advertising spend”, another key barometer of economic and consumer confidence, also saw its growth slow to 11 per cent in the third quarter, compared with 13 per cent in the previous quarter and 17 per cent for the same period last year.
But Nielsen remained positive. “As we enter into the fourth quarter, we expect spending to improve as confidence improves in the Chinese economy and we enter into the Christmas period,” Rust said.