2 in 3 consumers to cut spending: survey

The Business Times
Published November 13, 2008
2 in 3 consumers to cut spending: survey
MasterCard consumer confidence index takes a slide

By NISHA RAMCHANDANI

T looks like the coming months will be a bumpy ride for retailers, as 64 per cent of Singaporean consumers are keen to cut back on discretionary spending over the next year, a study revealed.

According to the MasterCard Worldwide Index of Consumer Purchasing Priorities, 26 per cent of Singaporeans plan to save up to 10 per cent of their total income, while around 24 per cent expect to save between 11-20 per cent and 16.5 per cent plan to save between 21-30 per cent.

Dining and entertainment (58 per cent), fitness and wellness (54 per cent) and personal travel (53 per cent) are tipped to be the top three spending categories. However, big ticket items such as cars and consumer electronics were nowhere to be seen among the more popular picks.

'Consumers across the region are bracing themselves for tougher times ahead in 2009. While many are looking towards China to help maintain economic growth momentum in the region, the fact is that Asia's economic powerhouse itself is slowing down fast,' said Yuwa Hedrick-Wong, economic adviser for MasterCard Worldwide (Asia-Pacific).

Some 6,000 consumers across 14 Asia-Pacific markets were surveyed through September, of which 400 were from Singapore.

At 62.3, consumer confidence in Singapore is significantly lower than the 87.3 scored six months ago and also below the market's historical average of 67.6.

MasterCard's Index of Consumer Confidence measures consumer confidence on a scale from zero to 100, with 100 being most optimistic, based on outlook towards employment, the economy, regular income, the stock market and quality of life.

The overall index was at 47.4, down from 55 in H108 and 67.3 a year ago.

Comparatively, Singapore was still among the four of the 14 markets surveyed that remained optimistic. Singapore was ranked fourth in the region, trailing Vietnam (88.1), China (76.6) and India (63.9).

Consumer confidence in Vietnam has remained relatively optimistic over the last year or so.

In contrast, markets such as Hong Kong and Taiwan suffered dramatic drops, falling from 83.1 in H108 to 41.8 in H208, and from 71.3 in H108 to 32.1 in H208, respectively.