HK Confidence Rebounds But Consumers Wary

HONG KONG - After two consecutive quarters of decline, Consumer confidence has rallied with a four points increase in the first quarter of 2012 due to Scheme $6,000 payout and positive impact driven during festive seasons, a latest Nielsen study shows.

Last quarter's improved index was a result of consumers increase in optimism for the outlook of job prospects (+5%), state of personal finances (+3%) and spending intent (+3%) compared with the previous quarter.

"The HK$6,000 scheme by the HKSAR government, the bonus payout at the beginning of the year, combined with the festive seasons made a positive impact on consumers' optimism," Oliver Rust (pictured), managing director at Nielsen Hong Kong, said.

At 103 points last quarter, Hong Kong consumer confidence rose four index points yet it still has not reached the same level as a year ago (107 index points in Q1 2011).

The economy continued to top Hong Kong consumers' concern, followed by increasing food prices. Although the job market is improving, consumers' concern over job security increased by 8% compared to a year ago.

“Although the overall unemployment rate in Hong Kong has remained relatively stable, much publicised news about layoffs fuelled consumer insecurity about the future job outlook," Rust said. 

Hong Kong consumers have increased their saving, with 73% claiming to put away spare cash, up from 68% from the same period last year.

"While consumers remained cautious about spending, year-on-year discretionary spending showed a decline for new clothes (-3%), new technology products (-5%) and home improvements (-2%),

"Spending outlook for 2012 will continue to remain conservative," Rust added.

The survey was conducted in February 2012.