August 01, 2011
Kuala Lumpur, 1 August 2011 – Consumers across Asia/Pacific are concerned at the slow pace of the global economic recovery with a dip in optimism recorded over the last six months, according to the latest MasterCard Worldwide IndexTM of Consumer Confidence.
As the global economy continues its slow recovery, 11 out of the 14 Asia/Pacific markets polled for the Index recorded positive consumer sentiment with stable optimism recorded in emerging and established markets including China (78.3), Singapore (77.9), Vietnam (77.1), India (75.2), Hong Kong (69.9), Taiwan (67.6), Malaysia (64.9) and Australia (63.1).
In Malaysia, the index score was a positive 64.9, a slight drop from 66.2 six months ago. Consumer sentiments towards Regular Income (70.4 vs. 62.9) have improved from six months ago, but consumers are less optimistic about Employment (64.6 vs. 65.9), the Economy (64.9 vs 66.2), Quality of Life (65.9 vs. 70.0) and the Stock Market (58.4 vs. 66.2).
However, 10 out of the 14 Asia/Pacific markets experienced an overall decline in consumer confidence when compared to the previous six months, with three markets - Thailand (46.1), New Zealand (42.2) and Japan (15.9) - showing widespread pessimism across the five key indicators. Overall Asia/ Pacific recorded a drop in consumer confidence from 68.0 to 61.5.
Now in its 19th year, the MasterCard Worldwide Index of Consumer Confidence is the region’s most comprehensive and longest running consumer confidence survey. 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.
The latest survey was conducted from 15 March to 27 April 2011 and involved 10,374 consumers from 14 markets. Data collection was via internet surveys, personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The Index and its accompanying reports do not represent MasterCard financial performance.
Overall confidence in the Economy in the Asia/Pacific region fell from 70.6 to 59.1, with Employment down from 67.5 to 59.9. Confidence also fell among consumers on the key indicator of Quality of Life (from 64.7 to 57.0) and the Stock Market (from 65.8 to 58.1), but increased slightly on Regular Income (from 71.6 to 73.1).
Japan and New Zealand, both still recovering from devastating earthquakes this year, experienced declines in consumer confidence across most key indicators, with New Zealand’s overall confidence falling from a positive 53.3 in the previous six months to a pessimistic 42.2, with a strong decline in confidence in the Economy (from 53.1 to 35.1). Japan’s overall consumer confidence was at its lowest since 2002, with confidence in the Economy falling from 20.6 six months ago to 12.3 and confidence in Employment down from 21.8 to 13.3.
Steep falls in consumer confidence were found in the Philippines, where optimism fell from 80.1 to 53.6 over the last six months, and across all key indicators, most dramatically in Employment (80.0 to 45.3), Qualify of Life (80.5 to 46.7) and the Economy (83.6 to 54.0).
“While consumer attitudes remain overwhelmingly positive across this Index there is clearly a perception that the recovery from the financial crisis is not going as smoothly as people would like,” said Yuwa Hedrick-Wong, global economic advisor for MasterCard Worldwide.
“Consumers are fantastic barometers of economic performance. As parts of the world have endured six very difficult months dealing with natural disasters, political instability and with ongoing financial uncertainty across the Eurozone, it is no surprise to see consumer sentiment declining across some of these markets.”
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The MasterCard Worldwide Index™ of Consumer Confidence survey has an 19-year track record of consumer confidence indices collected from over 200,000 interviews, unequalled both in scope and history across Asia/Pacific.
The MasterCard Worldwide Index of Consumer Confidence is the most comprehensive and longest running survey of its kind in the region. In June 1997, the Index revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional economic crisis. In June 2003, the Index score for Employment in Hong Kong dropped to a low of 20.0. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at eight percent.
The survey comprising the Asia/Pacific markets began in the first half of 1993 and has been conducted twice yearly since. Markets from the Middle East and Africa were included in the Index from 2004. Twenty five markets now participate in the survey: Australia, China, Egypt, Hong Kong, India, Indonesia, Japan, Kenya, Kuwait, Lebanon, Malaysia, Morocco, New Zealand, Nigeria, Oman, Philippines, Qatar, Saudi Arabia, South Korea, South Africa, Singapore, Taiwan, Thailand, United Arab Emirates and Vietnam. The last MasterCard Worldwide Index of Consumer Confidence survey was conducted from 15 March to 27 April 2011. A total of 17,620 qualified respondents were surveyed in the 25 markets with the sample being representative of the middle and upper income groups in each market. In each market except China and India, 400 or more people were surveyed. A minimum sample size of 800 was collected from China and India.
The Index is calculated based with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. Five economic factors are measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life. The responses are consumers' thoughts on the six months ahead. Data collection was via internet surveys, personal, telephone and Computer Aided Telephone interviews, with the questionnaire translated to the local language wherever appropriate and necessary. The survey has a margin of sampling error of plus or minus four percentage points at the 90 percent confidence level, except China and India where because of the larger sample, the margin of sampling error is plus or minus three percentage points.
The MasterCard Worldwide Index suite in Asia/Pacific, Middle East and Africa includes the long-running MasterCard Worldwide Index of Consumer Confidence, as well as the MasterCard Worldwide Index of Women’s Advancement, Online Shopping, Index of Financial Literacy, and the Index of Global Destination Cities. In addition to the Indices, MasterCard’s research properties also include a range of consumer surveys including Ethical Spending and a series on Consumer Purchasing Priorities (covering Travel, Dining & Entertainment, Education, Money Management, Luxury and General Shopping).
MasterCard also regularly releases Insights reports providing analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific, Middle East and Africa region. Over 80 Insights reports have been produced since 2004.
MasterCard has also released a series of four books on Asian consumer insights, authored by Dr. Yuwa Hedrick-Wong, Global Economic Advisor for MasterCard Worldwide and published by John Wiley & Sons.
MasterCard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. MasterCard’s products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MasterCardNews, join the discussion on the Cashless Conversations Blog and subscribe for the latest news.