SOURCE: The Conference Board Global Consumer Confidence Report, in collaboration with Nielsen
KUALA LUMPUR: Malaysia has placed seventh globally on the Consumer Confidence Index (CCI), with an index score of 118 points in the fourth quarter of 2018 (4Q18), according to The Conference Board Global Consumer Confidence Survey, which is produced in collaboration with Nielsen.
According to the survey, while there is a nine-point decrease from the previous quarter, the country still posted the biggest year-on-year gain among the 64 countries measured, up 24 points versus 4Q17.
The CCI is driven by three indicators, which are consumers’ perception on local job prospects, personal finances and intentions/readiness to spend. While consumers are slightly less optimistic on their personal finances compared to last quarter, perception on local job prospects and intentions/willingness to spend remain stable.
“This is the fourth consecutive quarter that Malaysia’s CCI score has been above the 100 mark, highlighting Malaysians’ optimism on the country’s economic outlook in 2018,” said Nielsen Malaysia executive director of Consumer Insights, Anil Antony.
“While we experienced an all-time high in confidence in the third quarter of the year, consumers are starting to have a more realistic view of the economy and state of their finances, particularly as the excitement following a historic election tapers off and life under the current government becomes the new normal.”
According to the survey, 70 per cent of Malaysians believe the state of their personal finances in the next 12 months would be excellent or good (versus 77 per cent in 3Q18, 52 per cent in 4Q17) while 71 per cent have a positive view on their job prospects in the next 12 months (versus 75 per cent in 3Q18 and 47 per cent in 4Q17).
Aside from that, the survey reported that 53 per cent say that “now is the time to buy the things they want and need” compared with 58 per cent in 3Q18 and 33 per cent in 4Q17.
The economy continues to rank as the top concern among Malaysians (37 per cent versus 38 per cent in 3Q18), followed by job security (19 per cent versus 21 per cent), debt (18 per cent versus 11 per cent) and work-life balance (18 per cent versus 20 per cent).
Approximately two in three consumers still believed that Malaysia is in a recession (69 per cent, in-line with 3Q18); of this, only 44 per cent are optimistic that the economy will recover in the next 12 months (down eight per cent quarter-on-quarter).
Commenting on recessionary sentiment, Antony said: “The percentage of consumers who believe the country is in a recession is much lower than the levels seen in 2017 and 2016.
“The weakening of the Ringgit against the US Dollar in the fourth quarter may be why fewer people are optimistic for an economic recovery in the next 12 months”.
Four in five Malaysians (84 per cent) say that they have adjusted their spending habits to save on household expenses.
Actions taken to control expenses include spending less on new clothes (52 per cent versus 39 per cent in 3Q18), cutting down out-of-home entertainment (50 per cent compared to 35 per cent in the previous quarter) and switching to cheaper grocery brands (41 per cent compared to 32 per cent in 3Q18). When economic conditions do improve, less than a third intend to continue saving on these items.
After covering the cost of essential living expenses, consumers say that they channel their spare cash towards their savings (62 per cent), paying off debt, credit cards or loans (35 per cent), and holidays (34 per cent).
The Conference Board Global Consumer Confidence Survey, in collaboration with Nielsen, measures perceptions of local job prospects, personal finances and immediate spending intentions among more than 32,000 respondents with Internet access in 64 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.