KUCHING: The Malaysia consumer confidence index continued its surge in the second quarter of 2018 (2Q18) to 117 percentage points (pp), up 13 points from the previous quarter and up 23 points versus 2Q17, according to The Conference Board Global Consumer Confidence Survey, in collaboration with Nielsen.
This is the highest recorded confidence score in Malaysia since the turn of the decade, which can be attributed to post-election optimism, as well as the ‘zeroristion’ of the goods and services tax (GST) on June 1, 2018.
The high score propelled Malaysia to become the seventh most confident country in the quarter, up eight spots from the previous quarter.
“In the weeks following the election, there has been a sense of optimism, amplified by the government’s move to stabilise the price of fuel and withdraw the GST,” says Raphael Pereda, Managing Director of Nielsen Malaysia.
“The overall positive sentiment has translated into significant year-on-year improvements in recessionary sentiment, economic outlook and job prospects.”
Approximately two thirds (65 per cent) of Malaysians believe the country is currently experiencing a recession (a significant decrease compared to 72 per cent in Q1 2018 and 83 per cent in 2Q17).
Of this, more than half (57 per cent) expressed confidence that Malaysia will recover from the recession in the next 12 months – significantly more optimistic compared to 32 per cent in Q1 2018 and 25 per cent in 2Q17.
While concerns about the economy have reduced compared to a year ago, it still remains the top worry among consumers. However, there appears to be a year-on-year rise in concerns about job security and debt.
“While Malaysians see a bright future ahead of them, they are still grounded in reality and continue to express concerns on bread and butter issues,” says Pereda.
“However, levels of optimism are significantly higher than they were a year ago”.
Indeed, a majority of Malaysians believe that the state of their personal finances (69 per cent) and their job prospects (73 per cent) in the next 12 months will be excellent or good – a significant improvement compared to 52 per cent and 44 per cent, respectively, in 2Q17.
Asian consumers are the world’s most avid savers in the quarter – Hong Kong (72 per cent) and the Philippines (71 per cent) edged out Vietnam (70 per cent) as the top two countries where consumers are most likely to save their spare cash. Singapore (69 per cent), Indonesia (66 per cent), India (65 per cent), Taiwan (65 per cent), China (64 per cent), Malaysia (64 per cent) and Thailand (64 per cent) rounded up the world’s top 10 savers.
Globally, an average of 53 per cent of consumers said that they save extra cash that they have after spending on essential living expenses.
Forty three per cent of Malaysian consumers also said they spend their spare cash on holidays or vacations – up 2 per cent compared to respondents in 1Q18; the same percentage also intend to use the money to pay off their debts.
When asked if they have changed their spending habits in the last 12 months to save on household expenses, 84 per cent of Malaysian consumers said yes, with 54 per cent of respondents spending less on new clothes, 50 per cent cutting down on out-of-home entertainmentand 47 per cent switching to cheaper grocery brands.
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.