Consumer Confidence Brittle
Local residents began to have more positive sentiments about the city’s economy during the fourth quarter of 2016 despite the fact that a decrease was recorded in their overall consumer confidence for the same period, according to the latest survey on consumer confidence by the University of Science of Technology (MUST) released yesterday.
For the three-month period, the Macau Consumer Confidence Index registered 83.63 out of 200, which is down by 2.38 per cent from 85.67 of the third quarter of 2016, implying ‘a significant decline in local consumers’ overall confidence,’ said the surveyor.
According to MUST, the index is calculated based on six indicators; namely, ‘local economy’, ‘employment’, ‘consumer prices, ‘living standards’, ‘housing purchase’ and ‘stock investment.’ Index scores below 100 suggest a lack of confidence, while scores over 100 imply a positive outlook.
During the period, the sub-index of the ‘local economy’ jumped 1.56 per cent quarter-to-quarter to 99.55, extending the previous quarter’s upward trend - but was the only indicator to post an increase.
The findings indicate that the significant growth showed local consumers were less pessimistic about the overall performance of the local economy.
In addition, the report notes that people who were more confident in the local economy during the quarter tended to be those with primary or lower education as well as well as those whose monthly income was less than MOP15,000 (US$1,875).
Employment concerns increase
Meanwhile, even though local residents reckon employment was quite stable in the quarter - as their confidence level reached 100.28, and was the highest among the six sub-indices in the survey - the points decreased by 2.15 per cent from the third quarter of 2016.
‘It dropped somewhat, but was still above the 100-point ‘having confidence’ level and the highest among the six sub-indices […] implying that Macau consumers had become cautiously optimistic about local employment,’ the survey explained.
Moreover, local residents were more concerned with consumer prices in the quarter, which also increased their living pressures.
According to the survey, the sub index of ‘consumer prices’ fell 2.22 per cent quarter-to-quarter to 72.74 whilst that of ‘living standards’ fell 1.37 per cent quarter-to-quarter to 97.24 for the three months.
The decreases imply ‘a significantly increased concern of Macau consumers in inflation in the near future . . . [and] . . . an increase in local residents’ living pressure due to local inflation,’ said MUST.
On the other hand, the sub index of ‘housing purchase’ remained the lowest of the indicators, at 54.89, plunging 7.4 per cent quarter-to-quarter, showing ‘a further worsening of the negative sentiment among potential residential home buyers.’
In addition, amidst the fluctuations of the stock market, consumers’ confidence in ‘stock investment’ dropped 5.17 per cent quarter-to-quarter to 77.07 for the three months, which reflects ‘a big decrease in the willingness of local consumers to invest in the volatile stock market.’
Regional co-operation and education necessary
Given only the sub-index of ‘local economy’ posted an increase for the quarter, the surveyor suggests the MSAR Government further deepen its regional co-operation with Mainland China and Hong Kong.
The surveyor added that the education level of consumers has played an important role in their confidence.
‘Since its launch in the fourth quarter of 2008 [the index] has shown a consistent pattern in the past 33 quarters that the higher the consumer’s education level the higher their confidence,’ it said. ‘So focusing more on education and training as well as motivating and supporting citizens’ continuous learning and self-enhancement should be of fundamental importance for increasing Macau consumers’ confidence.’
Furthermore, promoting moderate economic diversification, reducing the effect of external uncertain factors on the local economy, consolidating anti-inflation results, as well as improving the balance between housing supply and demand would also help increase residents’ overall consumer confidence, the institution opined.