HONG KONG: Hong Kong's third-quarter consumer confidence rose the most in the world, a survey showed yesterday, demonstrating a sharp turnaround in the city's consumer sentiment.

Optimism in local job prospects and spending rebounded strongly, sending the city's consumer confidence index (CCI) up 14 points to 93 in the third quarter, the highest increase among 54 markets surveyed, according to The Nielsen Company.

The city's CCI stood at 79 in the second quarter.

Consumers are becoming more hopeful towards their personal finances. More than half, or 55 percent of Hong Kong consumers described their state of personal finance as good in October.

By contrast, Hong Kong ranked as one of the world's top ten most pessimistic economies about local job prospects in April this year, when 37 percent of respondents ticked "good" for their personal finance status.

"Since the second half of 2007, consumer confidence in Hong Kong was on a steady decline, but in the past six months this trend has reversed significantly. The pace of the recovery has accelerated in the last three months," said Oliver Rust, Managing Director for Nielsen in Hong Kong.

The firm believes the key factor behind the increase is consumers' rosy outlook regarding local job prospects, which has positively influenced their perception of personal finances and encouraged them to spend more.

Economists think that the city's rapidly growing stock and property markets enhanced Hong Kong people's perception of their financial situations.

"The growing property and share prices make investors think their asset value is increasing," said Law Ka-chung, Chief Economist and Strategist at Bank of Communications.

"Overall household income has been falling over the last few months, and the decrease hasn't ceased yet," he added.

A gradual improvement of the local economy, coupled with rising asset prices should boost consumer confidence, Joanne Yim, chief economist of Hang Seng Bank, said in a research note.

The survey also found that 68 percent of the respondents in Hong Kong said they no longer think the city is in a recession.

"Hong Kong consumers feel that the worst of the global financial recession is behind them and early indications show that they are looking to spend on high ticket items," said Rust.

Nielsen, an international market information firm, conducted the latest global consumer confidence survey between late September and middle October and polled over 30,500 consumers in Europe, Asia Pacific, North America and the Middle East about their confidence levels and economic outlook.

The study showed that South Korea was the close second with a 13-point rise, with Brazil third, enjoying a 12-point jump.

(HK Edition 11/04/2009 page4)