Consumer confidence stable in third quarter
Malaysia ranked 10th most confident in the world
KUALA LUMPUR: Malaysia remains the 10th most confident country in the world based on the latest Consumer Confidence Index (CCI) for the third quarter of this year (Q3’19).
With an index score of 109 points, the country is still ranked 10th globally on the CCI in line with the 110 points posted in Q2’19.
Malaysia, however, saw a drop from the all-time high of 127 points in Q3’18, according to The Conference Board Global Consumer Confidence Survey, which is produced in collaboration with Nielsen.
The CCI is driven by three indicators, which are consumers’ perception on local job prospects, personal finances and intentions/readiness to spend. In Q3’19, 62% of Malaysians believed the state of their personal finances in the next 12 months will be excellent or good (versus 63% in Q2’19, 75% in Q3’18).
During that period, 68% had a positive view on job prospects in the next 12 months (versus 63% in Q2’19 and 77% in Q3’18) and 44% said “now is the time to buy the things they want and need” (versus 48% in Q2’19 and 58% in Q3’18).
“Since the all-time high index score in Q3 18, we have seen a steady quarter-on-quarter decline in consumer confidence. However, the index score appears to have stabilised in Q3’19. Slower GDP growth and higher headline inflation compared to the previous quarter did little to dent Malaysians’ overall confidence regarding their future financial prospects,” said Luca De Nard (pic), managing Director of Nielsen Malaysia.
The survey showed more than 70% of Malaysians believe that the country is currently in a recession (73% versus 70% Q2 19); among these, 34% are optimistic about an economic recovery in the next 12 months (versus 38% in Q2 19).
In Q3’19, Malaysians’ top concerns were the economy, job security, work-life balance, political stability and debt, it noted.
“While concerns on the economy and job security have fallen significantly since the beginning of the year, they continue to top the list of what matters most to Malaysians.
“As concerns about kitchen table issues such as increasing utility and food prices remain low, worries about political stability surface to become one of the top five concerns in Malaysians’ minds,” said De Nard.
Given their longstanding concerns on the economy, Malaysians continue to be financially prudent, with a majority of consumers (82% in Q3’19 versus 87% in Q2’19) saying that they have adjusted their spending habits to save on household expenses.
“Consumers said that they were saving money by spending less on discretionary items such as new clothes and out-of-home entertainment, as well as switching to cheaper grocery items.
“This sentiment is validated by our recent Global Consumer Loyalty Survey, which showed that Malaysians are price sensitive consumers – close to half of consumers (49%) said they will always switch brands if it is better value for money, while 47% will switch if there is a price reduction or promotion.
“This is something that brands and retailers should be cognizant of in their pursuit of winning the customer share of wallet,” he added
When asked how consumers utilise their spare cash, he said 60% put their money in savings (versus 54% in Q2’19), 40% spend on holidays or vacations (versus 28%), while 39% (versus 33%) pay off debts, credit cards and loans.