by S BIRRUNTHA / pic by HUSSEIN SHAHARUDDIN
MALAYSIA sits sixth globally on the Consumer Confidence Index in the first three months of 2019, largely unchanged from the previous quarter, despite the uncertain economic outlook.
The survey produced by the Conference Board Global Consumer Confidence Survey in collaboration with Nielsen Holdings plc, showed Malaysia posted the fourth-highest year-on-year gain among the 64 countries measured, up 11 points compared to the corresponding period a year ago.
Malaysia posted an index score of 115 points during the January-March 2019 period, slightly lower than 118 points recorded in the previous quarter.
The survey measures three indicators which are consumers’ perception on local job prospects, personal finances and intentions/readiness to spend.
Nielsen said while perception on personal finances and job prospects are in line with the previous quarter, there is a significant decrease in readiness/intent to spend.
The survey showed that 71% of Malaysians believed that the state of their personal finances in the next 12 months will be excellent or good, and 70% have a positive view of the job prospects in the next 12 months. But only 48% think that now is the time to buy the things they want and need.
The survey also showed more Malaysians are mindful about spending, with almost nine out of every 10 Malaysians, or 88%, said they have made changes in their spending habits to save money on household expenses.
Nielsen Malaysia MD Luca De Nard said although consumer confidence may not always reflect into spending, a majority of consumers are conservative about spending at this point in time.
“As such, brands who are able to demonstrate value for money are more likely to appeal to the cautious consumer,” he said in a statement.
De Nard added that the perception of the economy does not correlate to the actual economic performance in Malaysia.
“For example, we experienced consecutive quarters of low inflation, a consistently low unemployment rate of 3.5% and GDP growth of 4.7% in the fourth quarter of 2018 (4Q18), all of which contributed to the healthy total fast-moving consumer goods growth of 4.9% in 2018,” he said.
However, in 1Q19, there has been a significant increase in concerns about the economy in comparison to the past quarter, showing that messages encompassing the nation’s solid economy are not at the cutting-edge of consumers’ minds.
According to Shopper Trends study done by Nielsen Malaysia, a majority of consumers are price-sensitive and nearly half of them actively seek out in-store promotions.
“The bottom line is that Malaysians have always been financially prudent,” De Nard said.
He said when it comes to spending their extra cash, more than half of the consumers put it into their savings, 44% of them pay off their debts, credit cards and loans, while just over a third spend on holidays or vacations.