Consumers concerned over economy and jobs

MIER said the continuing threat of the Covid-19 pandemic has likely zapped consumers’ confidence and cut into their buying power, amid challenging labour market conditions.

PETALING JAYA: Consumers are increasingly worried about their income and job security as the Covid-19 pandemic continues, further straining their confidence, according to a survey by the Malaysian Institute of Economic Research (MIER).

According to MIER’s Consumer Sentiments Index (CSI) for the fourth quarter (Q4) 2020, household finances at the year-end were the weakest in nine months, as lost wealth hit those in the low income, rural areas and south the hardest.

Meanwhile, an all-time low of only 8% saw an increase in job opportunities.

“At 85.2, the latest MIER CSI had lost 6.3 points on the quarter, with all components that comprised the index registering lower this quarter, especially current finances.

“Not only is this the lowest reading in three quarters, its persistent stay below the 100-point threshold level of confidence indicates that consumers are losing faith in the economy and their well-being going forward.”

MIER said the continuing threat of the Covid-19 pandemic has likely zapped consumers’ confidence and cut into their buying power, amid challenging labour market conditions.

“While the majority (47%) did not see any change in their incomes in Q4 2020, those who enjoyed better finances recently fell to 11% from 16% a quarter ago.

Respondents who reported being worse-off than before also rose to a three quarter high of 42%, even surpassing the previous year’s 40%.”

MIER added that stable finances expected in the coming months may be on the skids.

“While most (41%) of the respondents do not foresee any change in their finances in the near term, more (21%) of them than the third quarter of 2020 (18%) are expecting theirs to worsen soon.

“There is, however, little change in those anticipating higher incomes in the coming months; 22% compared with the prior quarter’s 21% and last year’s 22%.”

MIER said consumers are currently frowning over the labour market.

“Only a handful of them were positive about the employment situation in the fourth quarter of 2020, as most opined otherwise.

“An all-time low of only 8% saw an increase in job opportunities in the fourth quarter of 2020, while those who thought jobs were hard to come by, surged to 67%, the highest on record since the inception of this survey in 1988.”

MIER added that the job outlook for early 2021 is generally lacklustre.

“Most respondents are of the opinion that either the availability of jobs will decrease further or remain unchanged in the months ahead, with 36% and 24% responses, respectively, while 23% perceived the situation favourably.”

MIER said the high-income, urban, northern and eastern households were the most optimistic about job vacancies opening up soon, totaling between 24% and 29%.

“Of those who responded negatively, most of the responses totaling 36% and 43% were contributed by those in the low-income, urban, rural and south categories.”