Consumer confidence in Asia mixed: Nielsen

During the quarter, consumer confidence in Asia went up one point, with five Asia-Pacific countries registering higher consumer confidence compared to the previous quarter.

India topped the regional and global list with a confidence index of 121, followed by the Philippines with an increase of one point to 119 and Indonesia at 117, down two points. Thailand recorded the biggest consumer confidence increase in Asia, up three points. China also saw an increase of two points, while Malaysia dipped by two. South Korea showed the lowest confidence in the region, dipping two points to 38.

“Similar to Europe, we are seeing an increasingly polarized Asia-Pacific region,” said Venkatesh Bala, chief economost at the Cambridge Group, a part of Nielsen. “On the one hand, there are high population markets with a robust consumption base like China, India and Indonesia. On the other hand there are export dependent markets like South Korea and Taiwan that are more exposed to precarious global economic conditions.”

Bala added that confidence in Hong Kong, the region’s financial center, has been hit hard as consumers feel particularly sensitive to the Euro Zone crisis as well as potential changes from elections and new leadership.

The study also showed that consumers in Asia Pacific are at least two times more likely to have spare cash than any other region. Only 8 per cent of respondents in Asia said they have no spare cash, compared with 21 per cent in Europe and 26 per cent in North America. Moreover, about 58 per cent of Asia-Pacific consumers channeled their spare cash to savings.

Personal finances represented a bright spot for consumers in the region, with more than half of the respondents (59 per cent) considering the state of their personal finances to be good or excellent. This number is up two percentage points from the third quarter of 2012 and one point from the year-ago period. However, despite this, consumers in Asia are showing caution, with 59 per cent putting off buying things they wanted and needed.

To that end, 49 per cent of consumers spent less on new clothes, while 44 per cent of respondents scaled back their out-of-home entertainment. Meanwhile 42 per cent tried to save on gas and electricity and 39 per cent delayed upgrading technology.

Still, saving intentions showed a decline, with 68 per cent of the respondents stating they had adjusted their spending habits in the past year to save on household expenditures, compared to 72 per cent in the third quarter of 2012. Concurrently, investing intentions, paying off debts and saving for retirement also declined.

On the job front, Asians continue to be the most optimistic. Respondents felt job prospects in Asia are looking up as the index went up two points from the previous quarter to 53.