Nielsen survey shows HK continues to buck global trend

Hong Kong's consumer confidence remained at its highest level since the first half of 2008 in the second quarter of this year, bucking the weaker global trend, according to the latest Nielsen's Global Online Consumer Confidence Survey, which was released on Tuesday.

The overall index for the city's consumer confidence came in at 107 in the second quarter, the same as the first quarter, according to the survey, which polled 31,000 Internet consumers in 56 markets from May 20 to June 7.

The latest index score was the highest since the first half of 2008 and came as consumer confidence around the world dipped on growing concerns about the economic recovery. At 89, global consumer confidence in the second quarter was the worst in six quarters. Consumer sentiment in Asia Pacific slipped by an unusually steep 9 points, while on the mainland, the confidence level was 3 points down on the previous quarter.

The stability of consumer confidence in Hong Kong was underpinned by a slightly larger share of respondents who expressed their willingness to spend - 48 percent in the second quarter versus 47 percent in the first quarter. But the percent of respondents who believed the city's job market would continue to improve in the next 12 months dropped by 4 percent after a massive 11 percent gain last time around.

"Although the overall unemployment rate in Hong Kong has remained relatively stable in the recent quarters (3.5 percent in the second quarter of 2011), yet the unemployment rate amongst the younger work force remains high over the years (up 18.6 percent versus a year ago) as competition intensifies due to a fresh batch of local graduates as well as talent from the mainland," Oliver Rust, managing director of Nielsen Hong Kong, said after the release of the latest figures.

Climbing food prices continued to worry most Hong Kong consumers, with 40 percent of the online respondents claiming this as their top concern for the next six months.

The city's inflation hit a near three-year high of 5.6 percent in June, fueled by soaring food prices, which were up 7.2 per cent, and rising rents, which gained 7.1 percent.

Hong Kong imports almost 90 percent of its food, mainly from the mainland where food prices posted sharp rises in recent months.

Consumer inflation accelerated to 6.5 percent on the mainland in July, up from the 6.4 percent it recorded in June. Food prices, in particular, surged 14.8 percent from a year earlier.

Increasing inflation in the city, according to Rust, may take a toll on people's willingness to spend.

"While Hong Kong consumers remain confident about the days ahead, the effects of inflation will continue to place pressure on people and as a result lead them to tighten their purse strings," he said.

emmaan@chinadailyhk.com

China Daily

(HK Edition 08/17/2011 page1)