Any recovery in consumer confidence could be a drawn-out affair due to the uncertainty of global conflict following the terrorist attacks on the United States. British-based consultancy Bigthinking chief executive Chris Jaques said it was difficult to measure consumer confidence in a war environment given that people generally tended to panic and were not willing to spend money on anything other than necessities. Business confidence had hit a new low following the terrorist attacks in New York on September 11, Mr Jaques said. 'Everyone is watching the US consumers' response to the latest interest-rate cut and wondering about the effect of another cut later,' he said. He said previous research showed that consumer spending lagged economic fundamentals, pointing out that people would not spend until they felt confident about the future. Even if the global economy recovered by next year, he said any boom in consumer spending would not return until 2004 and 2005. However, he was confident Hong Kong's consumer market would fare better than others due to its proximity to China. He said China and India would dominate growth in Asian consumption over the next 10 years. Bigthinking's research report assessed the impact of a recession on Asia's consumer behaviour and found that reduced disposable income resulted in a shift in focus to necessities with reduced consumption of personal items. It found that in the build-up to recession, consumers economised by not replacing clothing and footwear. Consumer durables and big-ticket items were cut, and leisure-related expenses immediately curtailed. However, Mr Jaques said food costs and other essentials would be maintained until financial pressure was severe. Using results from the 1998-2000 recession, the survey also indicated that vegetable oil, sugar, milk and instant noodles had seen increased sales, while demand for footwear and clothing fell steeply. Family, especially children, came first, and it was no longer acceptable to spend money on personal indulgences such as cosmetics. However, the survey suggested Asian consumers were more robust during a recession than their Western counterparts. Bargain-hunting and window shopping either remained constant or increased, even though there was less money to spend, Mr Jaques said. Even in recession, there tended to be a 'flight to quality' for things that were the most important. In various product categories, more versatile products bucked the trend and held or increased their value, while total market value plummeted, the survey said. For example, an Indonesian company had succeeded in launching a new multi-purpose lipstick which had a different colour on each end of the stick.