Singaporeans more cautious about spending

Singaporeans more cautious about spending

Bank executive Brenda Quek is looking forward to buying the next iPhone that is expected to be launched later this year.

But she is more lukewarm over a Hong Kong vacation she has been thinking about for a while, and is even thinking of putting it on hold.

"Buying the latest phone or gadget is necessary in our everyday life. A holiday is a luxury and we can enjoy that when we have the spare cash," said Ms Quek, who is in her 30s.

"The economy isn't doing so well now, so it would be more sensible to spend money on something that I would need for work instead of on a luxury."

More consumers like her are willing to cut back their discretionary spending on things such as holidays and stock investments, but not on new technology products, findings from a survey released yesterday by Nielsen showed.

A recent study of 487 people here found that, in the first quarter of the year, 35 per cent of consumers said the next 12 months would be a good time to buy things they need or want, a drop from 38 per cent a year ago.

This is despite the confidence level of consumers here - which covers areas such as job prospects, personal finances and the economy - for the same period was identical to that of a year ago, at 96 points.

A consumer-confidence level below 100 suggests pessimism.

Fewer people were spending spare cash on holidays - 46 per cent did so in the first quarter of the year, a 3 percentage point drop from a year ago.

Also, fewer were investing their spare cash in shares or mutual funds, with 27 per cent doing so, down 6 percentage points.

But 26 per cent of people - or a 4 percentage point increase from a year ago - were using their spare cash to buy new technology items.

CIMB economist Song Seng Wun said the findings suggest that consumers are more selective about their spending, as they believe there is still uncertainty in the economic outlook for Singapore and the world.

"People don't mind cutting back on other types of spending, but they must still have the latest gadgets," he said.

UOB economist Alvin Liew noted that gadgets could be "tangible and reachable" purchases to consumers, and spending on them could be spurred by recent product launches.

But, for financial investments, consumers could have lacked clarity on where markets were headed, so they could have been more conservative on that front, he said.

The Monetary Authority of Singapore said on Tuesday that, with continuing external and domestic challenges, the local economy is expected to pick up modestly this year.

Additional reporting by Winona Wee

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