KUALA LUMPUR: Consumer confidence of Malaysians dipped in the second quarter (2Q19) but they are still the tenth most confident globally, according to the Conference Board Global Consumer Confidence Survey.
The survey, which is produced in collaboration with Nielsen, has ranked Malaysia 10th globally on the Consumer Confidence Index (CCI), with an index score of 110 points in 2Q19.
This is a slight dip compared to the 115 points posted in 1Q19 and 117 points in the same quarter last year. The CCI is driven by three indicators, which are consumers’ perception on local job prospects, personal finances and intentions/readiness to spend.
Malaysians’ readiness to spend has not changed on a quarterly and annual basis, however perception on job prospects and personal finances has declined over the same time periods.
Sixty-three per cent of Malaysians believe the state of their personal finances in the next 12 months would be excellent or good (versus 71% in 1Q19, 69% in 2Q18). The same percentage (ie 63%) also have a positive view on job prospects in the next 12 months (versus 70% in 1Q19 and 73% in 2Q18). Where as 48% say “now is the time to buy the things they want and need” (in-line with 48% in 1Q19 and 50% in 2Q18)
“This is the sixth consecutive quarter of consumer optimism that Malaysia has enjoyed, after experiencing 17 consecutive quarters of pessimism since 4Q13, ” said Nielsen Malaysia managing director Luca De Nard (pic).
“While the consumer confidence index score has declined both on a quarterly and an annual basis, a score of 110 should still be viewed positively, as a majority of consumers continue to be positive on bread and butter issues such as their personal finances and job prospects, ” he added.
Recessionary sentiment in Malaysia remains high, with 70% of consumers believing that the country is currently in a recession (in-line with 69% 1Q19). Among those who think the country is in a recession, 38% are optimistic about an economic recovery in the next 12 months (down from 45% in 1Q19).
Kitchen table and lifestyle issues continue to be a priority among Malaysians, with the top five concerns being the economy (38%), job security (20%), work-life balance (18%), health (17%) and debt (16%), the survey noted.
Commenting on the evolution of Malaysians’ concerns over the past three years, De Nard said: “The economy and job security have always been at the forefront of Malaysians’ minds. However, over the past three years, we have observed a steady decrease in concerns surrounding increasing food, fuel and utility prices – which correlates to the low inflation we have experienced recently.”
“At the same time, Malaysians have become increasingly worried about the state of their health. This may be attributed to the recent spotlight that has been placed on the rise of lifestyle-related diseases among Malaysians, such as diabetes, heart disease, obesity and hypertension in the public sphere.”
He noted that this gradual focus on health and wellness is reflected in the growth of FMCG sales in the health and wellness category in recent time. In fact, health and wellness was the fastest growing category based on the Nielsen Retail Index in 2018 at 7.8%.
Malaysians have always been prudent when it comes to their finances. In 2Q19, a vast majority of consumers (87%) said that they have adjusted their spending habits to save on household expenses. They save by spending less on new clothes (48%), trying to save on gas and electricity (44%), switching to cheaper grocery brands (43%), cutting down on out-of-home entertainment (42%) and reducing holidays and short breaks (36%).
When asked what how they spend their money after they have paid for essential living expenses, one in two consumers said that they save their spare cash, while one in three pay off their debt, credit cards and house loans.