Sustained and stable of Malaysia’s consumer confidence
Date：2014/07/28
[Oriental Daily] (Kuala Lumpur 23rd) The latest Nielsen Global Survey of Consumer Confidence Index and Spending Intentions reported that, the Malaysia consumer confidence index in the second quarter of 2014 remain stable, increased 1 to 93 points compare to last quarter (lower than the global average of 97 points).
Richard Hall, managing director for Nielsen Malaysia said: “Although there are many thing happened in 2014 first quarter, but felt buoyed up by the stability of consumer confidence index.
We expected that Malaysia consumer confidence index will fell lead by the incident of Malaysia Airlines MH370, implementation of GST and credit crunch. I think this is a positive result, showing the public have the ability to facing any problem.
Nielsen Global Survey of Consumer Confidence Index and Spending Intention, established in 2005 until now, measured over 30,000 participants in 60 countries, determine consumer’s confidential, major concern and spending intention.
A baseline of 100 for consumer confidence index, over 100 indicate degrees of optimism, but below 100 indicate pessimism.
Nielsen’s report also shows that although consumer in Southeast Asia recently facing with political instability and the problem of food price rising, but they are still the world’s most optimistic group. While Thailand have the largest decline in the region, drop 3 points to 105 points.
Although Indonesia’s consumer confidence fell 1 point to 123 points in 2014 second quarter, but still ranked world second; Singapore and Vietnam decline 1 point compare to last quarter, confidence for both countries are 98 points.
Except Malaysia, the Philippines is the only country the confidence index showed an upward trend, confidence index was 120 points (increased by 4 points compare to last quarter, ranked 3 in the world)
Economic, food price are the main focus of Malaysia consumers.
Consumer confidence index in the second quarter of 2014 show that the economic situation, rising food prices and job stability are still the problems Malaysian most concern about.
37% of Malaysian said the economic situation is an issue they are most concerned about (falling 2 points), followed by 21% of consumers worried about food price rise within the next 6 months ( the same with previous quarter).
Increased by 1 point to 21% for job stability compare to last quarter, ranked No. 3
The report also showed that Malaysian increasingly worried about the political stability (rising 5 points to 12%) and debt problem (rising 4 points to 17%).
On the other side, compared with previous quarter, Malaysian consumers concerned has decline in some aspect, including health (slipped 5 points to 11%), crime and rising of fuel prices (both slipped 3 points to 9%).
“Given the overall consumer confidence index has not much changing, we expect Malaysian concern will only be a few change in short term.” Said Richard Hall
Although Malaysian consumer most concern regarding the rising of food price, but decline in healthy and crime is a matter for rejoicing.
Saving still the pressing matter
Among 5 Malaysian, 3 people will save the extra money after paying the necessary cost of living (64%, the same with previous quarter)
2014 second quarter confidence report showed that although Malaysian keen on saving, but they still willing to do large spending, such as vacation (increase 3% to 44% compare to previous quarter), shopping (increase 7% to 30% compare to previous quarter), housing renovation and decoration expenses (increase 6% to 20% compare to previous quarter).
Richard Hall said: “Although Malaysian worry about future overall economic, and the confidence index is lower than global average, but there is a positive result that consumer are willing to spending on non-essential items, and show that Malaysian remain the strong purchasing power.
Malaysian being careful consumer
80% of Malaysian adjust their consumption model to increase household saving (global percentage of 64%)
Malaysian consumer said that will continue to reduce spending in order to cut down family expenses even the improvement of country economic.
Malaysian will continue to cut down expenses to maintain household spending in 5 major aspects include reducing of gas and electricity (40%), reducing of shopping (34%), reducing of outdoor leisure (31%), selecting of grocery brands (28%), reducing of telephone cost (24%)
Compare to previous quarter, fast moving consumer good (FMCG) in second quarter show a negative growth.
Second quarter report showed Malaysia purchasing power on FMCG have a slight decrease.
Nielsen report show that 2014 second quarter FMCG fell of 1.5%, this mainly caused by increasing of Asian drinks and hair dyes at 2014 first quarter.
Richard Hall said: “FMCG is a challenge for retailers and their suppliers. After 10 years of steady growth, we reached a saturation state, means that retailers and supplier need try hard to gain market share.”