There has been a mild rebound of local consumer confidence in the short- and medium-term economic outlook, according to a report released by Hong Kong think tank Bauhinia Foundation Research Centre Wednesday.
According to the third quarter consumer confidence survey, which interviewed over 1,000 respondents, the Bauhinia Hong Kong Consumer Confidence Index – an index measuring consumer confidence of economic expectations and behavior in the next three months – rose to 117.1 in September from 111.0 in June. Consumer expectations of economic conditions over the next 12 months have also improved, with the Bauhinia Hong Kong Consumer Expectations Index rising to 94.6 from the previous 91.4.
“We believe the improvement of consumer confidence for the near term should be attributed to favorable news like the good performance of the mainland and local economies, and the slight improvement of our employment situation during the period,” said Bauhinia Foundation Chairman Anthony Wu.
The Hong Kong economy grew 6.5 percent in the second quarter compared with a year earlier, the fifth consecutive quarter which saw a rise. It also increased 7.2 percent in the first half of 2010 compared to the corresponding period in 2009.
The city’s jobless rate also fell to 4.2 percent during the June to August reporting period, the lowest since January 2009, which demonstrates that overall labor market conditions in Hong Kong continue to improve, the government said earlier.
But looking at the latest survey figures for the next 12 months – in comparison with the benchmark index figure of 100 set in June 2009 – local consumers remain less optimistic about the economic outlook compared with last year.
“People’s perception is consistent with economic reality. The city’s economy in the short term looks buoyant. But in the long run, there are still lots of uncertainties lying out there,” said Irina Fan, senior economist at Hang Seng Bank.
Fan believes the lackluster performances of economies in the US, Europe and Japan have had an impact on consumer expectations for the next 12 months. She said it also explained why respondents in the survey expected to spend less on one-off large purchases in the next three months.
“Hong Kong consumers have a lot of money in their pockets, but as the future looks unclear, they will become more cautious about spending large sums of money,” Fan added.
(HK Edition 09/30/2010 page2)