Consumers in Asia Pacific remain optimistic – MasterCard

Consumers continue to be optimistic in their sentiments, though cautiously so, according to the results of the latest MasterCard Worldwide Index of Consumer Confidence.

Although experiencing a marginal dip from the last survey, the latest Index score for consumer confidence is the second highest across the region in the last two years.

Now in its 18th year, the MasterCard Worldwide Index of Consumer Confidence is one of the region’s most comprehensive and longest running consumer confidence surveys. Released twice a year, the Index is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months based on five economic indicators: Economy, Employment, Stock Market, Regular Income and Quality of Life.

The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

Across Asia Pacific, which comprises 14 markets, overall consumer confidence remained modestly optimistic with an Index score of 68, marginally lower than six months ago (69.1) but higher than a year ago (66.3), when the region was beginning to recover from the effects of the global financial crisis.

Among the five survey indicators, respondents seemed most optimistic about Regular Income (71.6), less so than six months ago (73.5) but more than a year ago (65.5).

They were least optimistic about Quality of Life (64.7), although this is the highest score the indicator has received in over two years, indicating a gradual return to pre-crisis levels (66.7 for the survey of late 2007).

Consumers’ perceptions about the Economy (70.6) have become marginally less positive compared to six months ago (72.6) and a year ago (71.4), but these scores above 70 are still the highest the region has seen in over five years.

Similarly, the current score for the Employment indicator (67.5) is the second highest score the region has seen in the last five years. With regard to the Stock Market performance (65.8), consumers’ outlook is less positive than six months ago (68.3) and a year ago (67.5).

 “The scores indicate that while consumers may perceive the worst of the crisis as behind them, they are still wary in their outlook for the months ahead,” said Yvette Oh, group executive, Market Development, Asia Pacific, Middle East & Africa, MasterCard Worldwide. “This perception could be in large part due to the uncertainties caused by inflation, the various tightening measures that governments across the region are implementing, and the general slowdown in growth that the region is seeing post-crisis.

Nevertheless, it is encouraging to see that consumer perceptions about the Economy, Employment and Quality of Life are among the most positive in recent years.”

Respondents from Vietnam are the most optimistic (90.3) in the region, followed by those from Singapore (86.1) and the Philippines (80.1). Respondents from Japan (20.2) continue to look at the months ahead with pessimism, even more so than six months ago (27.8) and a year ago (24.4).

Consumer sentiment in New Zealand, although marginally optimistic (53.3), has taken a turn for the worse after two consecutive waves of higher optimism (65.9 six months ago and 69.7 a year ago).

Growth engines of the region China (79.4) and India (73.0) continue to remain positive in their outlook, although scores for China are lower than six months ago (83.0) and a year ago (85.3). This decrease is influenced by lower scores across all five indicators, with the Employment indicator seeing the highest drop in scores (71.2 vs. 79.8 six months ago). Scores in India, on the other hand, have risen (68.2 six months ago and 68.8 a year ago), bolstered by an increase in optimism across all five indicators measured.

Consumer sentiment in Thailand is at its most positive (57.3) in the last four years, while in the Philippines (80.1), this is the most positive consumers have been since 1997.

Filipino respondents’ outlook on their Quality of Life (80.5) and the Economy (83.6) are the highest ever scores recorded since the Philippines was included in the survey in 1995.

Elsewhere, the MasterCard Worldwide Index of Consumer Confidence in the Middle East and Africa showed increases in scores compared to six months ago.

Across the Middle East, overall consumer confidence has gone up marginally (71.6 vs. 69.2 six months ago). Respondents were most optimistic about Regular Income (83.0) and least optimistic about the Stock Market (63.2). At a market level, Saudi Arabia (95.1) and Qatar (83.6) top list in overall Consumer Confidence, with Saudi Arabia seeing the highest score in three years.

The overall consumer confidence score across the four Africa markets surveyed increased to 79 from 73.7 six months ago, bolstered primarily by substantial increase in optimism in Nigeria (94.3 vs. 83.2 six months ago) and Kenya (87.3 vs. 73.5). Morocco (65.3), however, saw a significant drop in it consumer confidence score from six months ago (78.2), while the score for South Africa dipped to 54.7, the lowest in the market ever since it was incorporated into the survey in 2003.

The latest survey was conducted from 13 September to 11 November 2010 and involved 10,502 consumers from the following 24 markets:  Asia Pacific: Australia, China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand, and Vietnam

Middle East: Egypt, Kuwait, Lebanon, Qatar, Saudi Arabia, United Arab Emirates

Africa: Kenya, Morocco, Nigeria, South Africa.