Singapore consumer spending likely to ease in 2013: Report

Singapore consumer spending likely to ease in 2013: Report

SINGAPORE - Singaporean consumers were slightly less confident in the last quarter of 2012, heralding a potential slow-down in consumer spending in 2013, according to a consumer confidence index released by information company Nielsen.

Nielsen's latest quarterly report showed that consumer confidence in Singapore declined three index points to 95 points in Q4 last year, after a short-lived uptick in the third quarter. The last quarter of 2012 shows no improvement from the beginning of that year (96 points in Q1 2012) and confidence has been hovering below 100 points for six consecutive quarters within a range of 94 and 98 points.

The Nielsen report also revealed a 3-point increase in the number of consumers who are likely to hold back on spending over the next 12 months (64 per cent) and a 4-point increase in the number of consumers who feel their future job prospects would not be good (49 per cent) from Q3.

"The slight pullback in consumer confidence in Singapore is a likely predictor of a cut-back in discretionary spending in 2013," said Joan Koh, Managing Director, Nielsen Singapore and Malaysia.

"For companies this means that competition intensifies and it is even more important for marketers and retailers today to understand how they can execute an optimal marketing strategy which ensures sustained positive returns in the future."

The Nielsen Global Survey of Consumer Confidence and Spending Intentions measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access in 58 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Spending intentions over next 12 months dip

Nielsen's latest survey also highlighted lower consumer spending intentions across many discretionary areas, from taking holidays and buying clothes to stock investments. The biggest spending intention declines in Singapore were reported for investments in stock / mutual funds, down 8 points to 24 per cent and savings, down 6 points to 58 per cent, as well as saving for retirement, down 4 points to 20 percent.

With a slight increase in confidence in Q3 last year, spending intentions improved as well, although this seems to have been a short-lived uptick rather than a continuous improvement. The lingering cautious sentiment could be the result of consumers having less spare cash - 10 per cent of respondents say they have no spare cash in Q4, an increase of 3 percentage points from the preceding quarter.

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