City consumer confidence hits record low: AC Nielson

Updated: 2008-11-07 07:33

By Joey Kwok(HK Edition)

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Consumer confidence in Hong Kong has touched a record low, while more people would like to put their money in the bank amid global financial turmoil, said a survey by AC Nielson.

Conducting a survey over more than 26,000 customers in 52 markets from Sept 22 to Oct 6, Nielsen Global Consumer Confidence Index showed Hong Kong consumer confidence index registered a year-on-year decline from 118 to 88, the lowest level since the survey started in 2005.

Consumer confidence in the territory also fell off the global top 10 most optimistic list, to rank at the 16th, while 70 percent of Hong Kong people are skeptical about local job prospects and consider the next 12 months to be difficult.

Executive director of retail measurement Angel Young said the last 12 months have been challenging and turbulent for global consumers. With an economy closely intertwined with world demand, Hong Kong cannot remain unaffected, she added.

Finding themselves in turbulent times, Hong Kong consumers are giving top priority to savings, with almost 75 percent putting their money into savings if they have spare money, whereas only 46 percent claim to invest in shares, stocks or mutual funds, which was ranked the first in same period last year.

According to a survey conducted by CITIC Ka Wah Bank together with the Public Opinion Programme at the University of Hong Kong, about 27 percent of interviewees save one-fourth of their income, while 55 percent and 37 percent put their money into the saving and deposits accounts respectively.

Robert Chung, director of Public Opinion Programme at the University of Hong Kong, said people expect interest rate of the saving accounts may remain low, which boosts the demand for high-interest deposits accounts.

"Interviewees may feel uncertain toward the current investment market, so we expect the high proportion of saving at deposits accounts will sustain for a period of time," Chung said.

Despite a more cautious spending sentiment among Hong Kong people, Nielsen said consumers are not holding back from spending entirely but willing for good bargains.

"There are still business opportunities for companies in leisure, retail and entertainment sectors," Young said. She, however, added that the property and luxury-goods market will be badly hit.

Asked if the consumer confidence index will make further decline next year, Young said she is "cautiously pessimistic".

"The index will not show a quick rebound next year, it may maintain at the current low level," said Young, who also recommended enterprises to adjust their operation styles to seek more business opportunities.

(HK Edition 11/07/2008 page2)