Cross-straits consumer confidence continues upward trend
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Consumer sentiment towards economic development in mainland China, Hong Kong, Macau and Taiwan has been improving since the financial tsunami swept the world markets a year ago, with Hong Kong and Macau taking the biggest leap, according to a survey conducted by City University of Hong Kong (CityU).
CityU announced the 2009 third quarter results of the Hong Kong Consumer Confidence Index on 16 October. It also compared the results with the Chinese Consumer Confidence Index survey jointly conducted by CityU, Capital University of Economics and Business, Central University of Finance and Economics, Renmin University of China, Fu Jen Catholic University, in Taiwan, and Macau University of Science and Technology.
The overall Hong Kong Consumer Confidence Index has been rising for two quarters to 90.3, 2.8 points higher than the second quarter, and placed second after mainland China. Consumer confidence in economic development in all four places has been increasing for two consecutive quarters, with Hong Kong and Macau recording the biggest surge. The 2009 third quarter scores for Hong Kong and Macau increased 16.8% and 19.9% respectively from the second quarter, and 52.0% and 43.7% respectively compared with the first quarter.
“The rising index indicates consumer confidence in mainland China, Hong Kong, Macau and Taiwan has been recovering since the financial downturn and Hong Kong people have become more confident about the economic future,” said Dr Geoffrey Tso Kwok-fai, Associate Professor of CityU’s Department of Management Sciences, who carried out the survey.
The consumer confidence index, a component of the CityIndex to be launched by CityU reflecting the overall social and economic situation in Hong Kong, details consumer sentiment towards economic development, employment, consumer prices, living standards, housing purchases and stock investment. It serves as an indicator of spending intentions over a particular period by examining consumer perceptions about current and anticipated social and economic conditions.
The index uses a scale of 0 (representing no confidence) to 200 (complete confidence) to represent ascending levels of consumer confidence. Scores below 100 suggest people are lacking confidence while scores above 100 reflect relative confidence.
The overall Hong Kong Consumer Confidence Index shows an upward trend in 2009, though it has been below 100 for the past three quarters, reflecting Hong Kong consumers’ general lack of confidence in all six measured areas. Hong Kong consumers were still most confident about living standards (109.2) and were the least confident about housing purchases (75.5).
Confidence in economic development, employment, living standards and stock investment continued to improve, whereas confidence in consumer prices (-5.7) and housing purchases (-12.7) fell. Dr Tso believed this was probably due to rebounding consumer and property prices.
The 2009 third quarter Chinese Consumer Confidence Index results showed that overall confidence in mainland China ranked top (98.6) among the four locations, although it has slightly dropped for two consecutive quarters. Hong Kong placed second (90.3), followed by Macau (87.1) and Taiwan (61.2).
All surveys recorded higher optimism about economic development, but there were different trends in the other five categories of consumer sentiment. Confidence in consumer prices and housing purchases in mainland China, Hong Kong and Macau were lower than the last quarter but Taiwan recorded a slight rise in both categories. Respondents in mainland China, Hong Kong and Macau were most confident about economic development and living standards, whereas Taiwanese had most confidence in stock investment.
CityU has coordinated the Hong Kong Consumer Confidence Index since the third quarter of 2008. The research team collects views quarterly from more than 1,000 Hong Kong residents aged 18 or above.