Poll finds growing pessimism over state of personal finances

More Hongkongers think their personal finances will worsen than improve in the next 12 months, a Chinese University survey shows.

With inflation rising and the economic outlook uncertain, indices of consumer confidence and job market sentiment hit five-year lows in the regular survey.

Of 502 people interviewed for the quarterly poll, only 18 per cent thought their financial situation had improved in the past 12 months, while 34 per cent said they felt worse off - twice the proportion who said that three months earlier.

Twenty-nine per cent thought their financial situation would worsen in the coming 12 months, against 16 per cent who thought it would improve.

Forty-eight per cent said they felt neither better nor worse off than a year ago and the same proportion expected to be neither better nor worse off a year from now.

Asked their views about the business environment in Hong Kong in the coming 12 months, only 12 per cent thought it would be good.

The gloomy outlook may be affecting spending.

Two-thirds of respondents said now was not a good time to buy new furniture, an increase on the three-fifths who felt that way three months ago.

The consumer confidence index saw its second-biggest drop since the university's economics department launched the survey in 2000.

The index dropped from 100 in March to 78.4; the consumer sentiment index fell further, dropping 22.6 points to 78.1.

The employment confidence index fell 30.2 points to 76.5, its lowest since the severe acute respiratory syndrome outbreak in 2003.

The economists said the slowdown in consumption expected in the next few quarters could push down economic growth.

They said surging inflation, slower mainland economic growth and the US credit crunch triggered by falls in the value of assets backed by subprime mortgages had contributed to people's pessimism.