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S'poreans to spend more next year
Thu, Dec 17, 2009
my paper

By Dawn Tay

MORE Singaporeans plan to loosen their purse strings as the economy recovers, though prudent spending will still be on the cards for some time.

About one in seven respondents in MasterCard's latest survey on consumer habits plan to spend more in the next six months - up from just 3 per cent in its previous poll six months ago, before the economy turned in the third quarter. And the areas that they are most willing to spend on are food and entertainment; consumer electronics; and fashion and accessories.

Fewer people also said that they would tighten their belts and decrease their spending on non-essential items - 30 per cent now, down from 41 per cent.

But, reflecting the caution which is still lingering as the economy is not yet in the pink of health, more than half of those surveyed said that they plan to maintain the same amount of spending on non-essential items into the first half of next year.

The results of the survey on 400 people here - polled between Oct 1 and Nov 9 this year - were released on Tuesday. MasterCard Worldwide economic advisor (Asia-Pacific, Middle East and Africa) Yuwa Hedrick-Wong said that the latest findings are "positive for a stronger outlook of domestic consumption next year".

He said: "As global economic conditions continue to stabilise and trade starts to revive, barring any unexpected shocks to the economy, we expect private consumption to continue to grow."

Indeed, some restaurants said that they are seeing stronger demand. Les Amis group of restaurants' spokesman, Mr Raymond Lim, said that business has picked up by around 30 per cent between the lowest point in March this year and now.

However, he does not expect a huge jump in business during Christmas.

He said: "It has been a bad year and people are still cautious about spending.They're trying to get the greatest value for money, for example, by ordering cheaper wines.

"But they will still spend as they still want to find an excuse to have a good time during this festive period."

The last few months have seen an increase in credit-card expenditure, with figures from Credit Bureau (Singapore) also pointing towards an "improving consumer confidence that the economy and job markets are in recovery phase", said its executive director, Mr William Lim.

This year, bank executive Pee Xiao Juan, 25, will not be cutting back on gifts for Christmas, like she had to do the previous year.

Miss Pee said: "If I see something that I know my friends and family will love, I'll just tighten my own expenditure a little and buy it for them."

WHERE THE MONEY IS GOING

No. 1: Dining and entertainment
This remains the top choice for expenditure - 72 per cent will spend on it, up from 43 per cent six months ago.

No. 2: Consumer electronics
Gizmos jumped to the second spot from fourth place six months ago.

More than half polled will spend on them, up from 27 per cent previously.

No. 3: Fashion and accessories
Dropping to third from second spot, fashion and accessories drew 48 per cent polled, up from 40 per cent.

No. 4: Travel
Now, 42 per cent will spend on travel, up from 30 per cent six months ago, when it was in the third spot.

No. 5: Education
Now, 32 per cent of respondents plan to invest in self-improvement courses and continue their education, up from 18 per cent previously.

This fuelled its rise from the seventh spot.

dawnt@sph.com.sg


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