Hong Kong consumer confidence has significantly increased with the largest increase in the sub-index of Property Purchases

The Consumer Confidence Index (CCI) of the cross-strait region, Hong Kong and Macau for the fourth quarter of 2020 was announced on 8 January 2021. The overall CCI for Hong Kong is 64.1, down 6.7% quarter on quarter, but up 11.7% year on year (YoY). All the six sub-indices rose during this quarter, with the largest increase of about 35% in the sub-index of Property Purchases. However, all the figures are lower than 75, showing that Hong Kong consumers have not recovered their confidence regarding these aspects.

Increases in consumer confidence in five main aspects

There were increases in confidence levels in five main aspects: Property Purchases, Stock Investments, Employment, Commodity Prices, and Standard of Living.

Among these five aspects, the overall sub-index of Property Purchases measures at 62.9 (Table 1). It is no longer the aspect in which Hong Kong consumers have the lowest confidence among the six aspects. The index experiences a significant YoY increase of 19.8% and a huge increase of 35.3% compared with the last quarter. The result for current property purchases is 62.6 (Table 2), and dramatically increases by 36.7% when compared with the last quarter. Citizens’ confidence in property purchases for the coming three months is 63.1 (Table 2), considerably increasing by 34.3% from the last quarter, which indicates that Hong Kong consumers’ confidence level in this aspect has risen. However, the absolute value of the sub-index is low, which demonstrates that the locals’ confidence level in property purchases is still weak.

The overall sub-index for Stock Investment is 62.5 (Table 1), with a significant increase of 17.7% when compared with the previous quarter but a YoY decrease of 7.1%. The result for the present situation is 61.2 (Table 2), increasing significantly by 17.2% from the previous quarter. The confidence level for the coming three months is 63.3 (Table 2), with a significant increase of 17.9% compared to the former quarter, which indicates that consumers’ confidence level in this aspect has significantly increased. 

The overall sub-index of Employment is 58.9 (Table 1), a significant increase of 11.3% compared with the result of the last quarter but a significant YoY decline of 12.4%. The result for the present employment situation is 54.6 (Table 2), increasing considerably by 20% on the previous quarter. The index for employment confidence in the coming three months is 61.8 (Table 2), with an increase of 6.9% when compared with the previous quarter. However, the absolute values of the current and the future sub-indices are low, showing that consumers continue to worry about the employment situation. It is one of the aspects in which Hong Kong consumers have the lowest confidence among the six aspects.

The overall commodity price sub-index is 67.4 (Table 1), a significant YoY decrease of 11.5%. When compared to the last quarter, however, it shows an increase of 8.7%. This indicates the locals’ confidence level has risen gradually in this aspect. The current sub-index of commodity prices is 63.3 (Table 2), with an increase of 5.1% when compared with the former quarter. The result for the coming three months is 70.1 (Table 2), increasing by 10.9% from the last quarter, which indicates that Hong Kong consumers’ confidence level in this aspect has improved but it is still weak.

The overall sub-index of Standard of Living measures at 74.2 (Table 1). It experiences a significant YoY decrease of 11.1% but has increased by 4.5% from the previous quarter. It is still the most confident aspect of Hong Kong residents. The result for the current situation is 75.9 (Table 2), slightly decreasing by 2.1% compared with the last quarter. Their confidence index in living standard for the coming three months is 73 (Table 2), increasing by 9.4% when compared with the last quarter. The absolute value of the future sub-index is low, which demonstrates that Hong Kong residents have not recovered their confidence.

Consumer confidence in Economic Development remains weak

The sub-index of Hong Kong residents towards Economic Development is 58.9 (Table 1), with a YoY decrease of 9.8%. However, compared with the previous quarter, citizens’ confidence remains weak, with only a slight increase of 0.3%. The result for the present economic situation is 53.6 (Table 2), with an increase of 4.3% compared to the last quarter in this aspect. The result for economic confidence in the coming three months is 62.5 (Table 2), with a slight decline of 1.7% compared with the previous quarter. The absolute value of the sub-index is low, demonstrating that Hong Kong consumers are worried about the economic situation. It is one of the aspects in which the local consumers have the lowest confidence among the six aspects.

The overall result increases significantly compared with the result of the last quarter, due to the increase of consumers' confidence in all aspects. Especially, the sub-indices for Property Purchases, Stock Investments and Employment have significantly increased by more than 11%. However, the absolute value of the index is low, which indicates that Hong Kong consumers’ confidence level is still very low. The index figures for Economic Development and Employment are the lowest, showing that they are the aspects that consumers are most worried about. The situation is possibly caused by on-going pandemic over the past months.

 
Media enquiries:

Dr Geoffrey Tso Kwok-fai
Associate Head, Associate Professor and Director of the Statistical Consulting Unit
Department of Management Sciences            
City University of Hong Kong
Tel: (852) 3442 8568 or (852) 9020 9996

Mr Hu Yijian
Research assistant 
Department of Management Sciences
City University of Hong Kong
Tel: (852) 3442 8657 or (852) 6990 6084

 
Appendix A: Notes for Data Collection
City University of Hong Kong is responsible for the data collection for the captioned investigation. The survey for the CCI in fourth quarter of 2020 was conducted by telephone interview from 10 to 31 December 2020. A random sampling procedure was adopted, and 1,008 interviews were conducted with local residents aged 18 or above. The survey results have a 95% confidence level, and the sampling error is plus or minus 1.5 percentage points.

Appendix B: Notes for the Chinese Consumer Confidence Index
The Chinese Consumer Confidence Index was launched in the first quarter of 2009 and has been released on a quarterly basis since then. The overall consumer confidence score is an integrated index, measuring consumer sentiment about economic development, employment, commodity prices, standard of living, property purchases and stock investments. It reflects the confidence level of consumers in mainland China, Hong Kong, Macau and Taiwan. The index is jointly compiled by Capital University of Economics and Business, Central University of Finance and Economics, City University of Hong Kong, Macau University of Science and Technology, and Taipei Medical University.

The Chinese Consumer Confidence Index uses a scale of 0 to 200, with 0 representing “no confidence” and 200 representing “complete confidence”. If the index is below 100, it suggests consumers “lack confidence”, while if it is above 100, it suggests “relative confidence”.
 
Appendix C: Tables
Table 1. Results of the CCI index (Overall*)
Table 2. Results of the CCI (Present and Expected#)