Singapore consumer confidence plummets to post-2009 low

SINGAPORE - Consumer confidence in Singapore has dived to its lowest since June 2009, according to the Mastercard Index of Consumer Confidence for H1 2016.

According to data from the latest survey, Singapore's overall consumer confidence fell by 10.7 points on the index compared to H2 2015, pushing it from a neutral to pessimistic outlook.

Between June and July 2016, 8,746 respondents aged 18 to 64 in 17 Asia-Pacific markets were asked to give a six-month outlook on five economic factors including the economy, employment prospects, regular income prospects, the stock market and their quality of life to arrive at the figures in the index.

Results from these five indices measured by the survey reflected a pessimistic sentiment in Singapore. The largest drop was for the qualify of life measure, registering a 14.5-point fall to reach a pessimistic level from its originally neutral level.

Other indices which fell by a large amount included consumer confidence on the prospects of a regular income, which dropped by 12 points but still remained relatively neutral.

The employment prospect confidence indices dived 11 points, and consumer confidence for the economy dropped 9.9 points - both these confidence measures have become pessimistic, down from their originally neutral levels.

The smallest change for the confidence in the Singapore market was for the category of confidence in the stock market's performance, which retreated only 6.2 points. However, because consumer confidence was already pessimistic in H2 2015, the 6.2-point fall meant that Singapore's stockmarket outlook became very pessimistic, from its originally pessimistic level.

Overall, the Asia-Pacific remained stable in spite of the downward trend in global economic performance.

Other markets in the region that experienced a significant deterioration of confidence included Hong Kong, which took 12.4 points off its measure, and Indonesia, which dropped by 14.7 points.

Indonesia recorded the largest decrease in confidence levels of all the 17 markets surveyed. In particular, its consumer outlook in the categories of employment and of the economy registered particularly large drops of 26.9 points and 22.5 points respectively.

While Indonesia's outlook remained relatively optimistic in spite of the fall in confidence levels, Hong Kong - like Singapore - is at present experiencing a pessimistic consumer outlook, the survey showed.

Japan, falling by 8.8 points, was driven downwards by a 22 point decline in confidence in the outlook of their local stock market.

Thailand, dropping 8.5 points, continues its two-year slide since H1 2014 with confidence in the economy category registering the largest decline among the five components in this survey.

Nine of the 17 markets surveyed reported greater optimism, but the countries that experienced an especially significant increase in consumer confidence included the Philippines, rising by 12.9 points to become extremely optimistic, and Taiwan, rising by 16.3 points to arrive at a neutral consumer outlook.

Taiwan, which experienced extreme deterioration in consumer confidence in the previous survey, recorded the largest improvement in the current survey.

Deborah Heng, country manager for MasterCard Singapore, said: "Despite the fact that overall, consumer confidence has remained relatively unchanged in the region over the last six months, this masks significant fluctuations in confidence among several individual countries, including severe deterioration among Singapore consumers.

"We believe that this reflects the anticipated weak economic growth in Singapore for 2016, overall pessimism in the business sector, as well as the loss of confidence in the job market."

This article was first published on August 18, 2016.
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