Consumer confidence in mainland, Hong Kong and Macau drops for two quarters
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The latest consumer survey by City University of Hong Kong (CityU) shows that consumer confidence in mainland China, Hong Kong and Macau declined again in the first quarter of 2010 while in Taiwan it climbed for the fourth consecutive quarters. While consumer confidence in Taiwan is still lower than mainland China, Hong Kong and Macau, the gap is narrowing.
CityU announced the 2010 first quarter numbers of the Chinese Consumer Confidence Index on 12 April in Macau, jointly with Capital University of Economics and Business, Central University of Finance and Economics, Renmin University of China, Fu Jen Catholic University of Taiwan, and Macau University of Science and Technology. Consumer confidence scores in mainland China, Hong Kong and Macau were 92.3, 88.1 and 82.8, respectively, all lower than the previous quarter. Macau decreased the most (-4.7%). On the contrary, consumer confidence in Taiwan rose 8.4% to 72.2, though it was still below mainland China, Hong Kong and Macau.
The consumer confidence index measures consumer sentiment towards economic development, employment, consumer prices, living standards, housing purchases and equities markets. It serves as an indicator of spending intentions over a particular period by examining consumer perceptions about current and anticipated 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 adequate confidence while scores above 100 reflect good confidence.
The overall Hong Kong Consumer Confidence Index has been below 100 since the first quarter of 2009, reflecting consumers’ general lack of confidence. Hong Kong consumers were most confident about their living standards (108.4) and were most apprehensive about the housing scenario (58.1). Confidence in the employment market rose for the fourth consecutive quarters, rising to a record high of 99.1 in January-March 2010. Confidence in consumer goods prices and housing purchases, however, dropped to record lows of 66.8 and 58.1, respectively. This pattern was also observed in the previous quarter.
“The results show that Hong Kong people are optimistic about employment prospects while high property prices continue to hammer the confidence of would-be home buyers,” said Dr Geoffrey Tso Kwok-fai, Associate Professor at CityU’s Department of Management Sciences, who conducted the survey.
The drop in the overall consumer confidence in mainland China, Hong Kong and Macau was mainly due to the record low sentiment about prospects in the housing market. Macau recorded the steepest decline of 15.3%, to 37.6, while sentiment in Hong Kong and mainland China was down 12.4% (to 58.1) and 7.8% (to 62.9), respectively.
In Taiwan, consumer confidence in all six categories improved, with consumer goods prices registering the biggest improvement of 24.5%; the index number rose to 47.7. However, the sentiment was still the lowest among all the four locations.
The Chinese Consumer Confidence Index has measured quarterly consumer sentiment in mainland China, Macau, Hong Kong and Taiwan since the first quarter of 2009. The survey is conducted under an ongoing collaboration between six universities in the four locations, with CityU being responsible for research in Hong Kong. The 2010 (first quarter) survey in Hong Kong was carried out on 14-20 March; 1,001 interviews were conducted with local residents aged 18 or above.