SINGAPORE -- (Marketwire) -- 08/19/09 -- Consumer confidence rose during the second quarter in the four Southeast Asian countries repeatedly measured in the Asian Consumer Confidence Index survey by InsightAsia. Consumers in urban areas in Indonesia, Malaysia, Singapore and Thailand have increased their confidence about the prevailing economic conditions. In the first quarter the Consumer Confidence Index of these countries was lower, following media reports about the global recession and pessimistic forecasts of economic development. During the second quarter several economies in the Southeast Asian region have shown signs of recovery, and some have predicted positive growth figures in 2010. Consumer confidence has increased, though still remains below the neutral point of 100.
The increase is most evident in Singapore, where the Consumer Confidence Index rose from 62 to 88. Singapore depends more strongly on the global economy than other countries in the region and was impacted more severely by the recession, leading its consumers to be very pessimistic in the first quarter. The perception is significantly less dramatic in the second quarter. Consumers are less negative about the current state of the economy and the outlook of the coming year has changed from pessimistic to neutral. The increased confidence is matched by government reports that indicate that the strong contraction of the economy in the first quarter has slowed down in the second quarter. The growth prediction for 2009 was adjusted upwards but is still negative. Consumers seem to be aware that the recession is not over yet, since they expect unemployment to increase somewhat over the next year. Many Singaporeans are insecure about keeping their job and increasing their income.
Confidence in Indonesia and Malaysia has also increased and approaches the neutral level of 100. In Indonesia the Consumer Confidence Index rose from 83 to 97, Malaysia increased from 83 to 94. Urban Indonesians have become more positive about the current state of the economy and the outlook of the next year. Their view of the current economy has improved from negative to neutral. The expectation of the future was already optimistic in the first quarter and has become rosier in the recent measurement. Most Indonesians expect a decrease of unemployment in the next year. Though Indonesia is not immune to the global recession, economic growth is still positive and is predicted by the government to be around 4% for 2009.
Urban consumers in Malaysia still have a negative perception of the current state of the economy, though less negative than in the first quarter. Their outlook of the future is optimistic. Though consumers overall expect unemployment to increase, working Malaysians overall are not concerned about losing their job. GDP is predicted to contract with 4-5% in 2009, but the central bank predicts positive growth to resume in 2010.
Thailand has achieved the smallest increase of the four countries. The Consumer Confidence Index rose from 72 to 78. In addition to the global recession Thailand also faces domestic political instability. The worldwide media attention for the airport closure, demonstrations at the ASEAN summit and other forms of often violent protest have harmed the tourism industry and put doubts into the minds of foreign investors. Consumers in Thailand are more negative about the current state of the economy than consumers in the other countries and overall don't expect an improvement in the next year.
The general feeling among consumers in Indonesia, Malaysia, Singapore and Thailand is that this is a bad time to buy major household products. Even though consumers are generally neutral or optimistic about the outlook of the economy and their financial well-being, the current economic situation is perceived as negative and consumers are reluctant to buy durable consumer goods.
China was included in the survey for the first time in the second quarter. Chinese consumers are in a different state of mind than consumers in the other four countries. The Consumer Confidence Index is higher at 123. The economy of China is expected to grow with 6-7% in 2009 according to the IMF, despite the global recession. China is the only of the five countries in the survey where consumers feel it is a good time to buy major household items.
The increasing consumer confidence in Southeast Asia is a good sign for the region's economy. Exports to other parts of the world are low and thus far the recovery of the Asian economies has been driven mainly by demand in the region. Asian consumer confidence is an important indicator of this regional demand and the results of the second quarter of the Asian Consumer Confidence Index are encouraging.
InsightAsia is a fast growing market research agency, with an established reputation in Asia for best practice across a range of disciplines -- from quantitative and qualitative marketing research through to business consulting. Founded in 1997, InsightAsia has offices in Singapore; China; Malaysia; Indonesia; Thailand; The Philippines and Vietnam.
Consumer confidence measurements have long been used in developed markets by decision makers in government and industry to develop strategies and craft policies. Alongside trade data, labor market data, and GDP rates, consumer confidence index has become a critical indicator of economic performance.
Asian Consumer Confidence Index
Given the exceptional pace of economic growth and consumer demand in Asia, there is an urgent need for a continuous, independent measurement of consumer confidence focused on Asia, comparing various Asian countries to create a benchmark.