This article is from the Australian Property Journal archive
Australian consumer confidence levels continue to crumble and have fallen well below the historical average, according to the latest MasterIndexTM Consumer Confidence Survey by MasterCard.
According to MasterIndexTM, Australian consumers’ confidence rating has fallen 10 basis points from a year ago, from 56.5 to 46.5, only marginally above those recorded during the sluggish economic performances of the late 1990’s.
The six monthly survey found Australian consumers’ outlook on Employment declined 20.7 basis points from a year ago, falling 53.5 to 32.8, while Quality of Life ratings fell from 52.5 to 39.5.Except for positive sentiments on Regular Income to 73.3 basis points.
In addition the survey found the outlook for the second half of 2006 is pessimistic.
Australia’s results are reflective of survey findings throughout the Asia/Pacific region, which revealed consumer confidence has fallen to 57.4 basis points from 61.4 a year ago, and are also below the historical average of 59.7.
Consumer confidence across the region has diminished in the face of increases in crude oil prices, continued unrest in the Middle East, China’s appreciation of its currency followed by Malaysia’s revaluation of the Ringgit, sporadic deaths in the region attributed to the Avian flu, and public dissatisfaction with the ruling government in some markets.
“Despite Australia’s somewhat pessimistic results, both employment and income levels remain solid and are a positive indication that household spending and economic growth will be maintained,” MasterCard’s Asia/Pacific economic advisor Dr. Yuwa Hedrick-Wong said.
“Amid the lacklustre consumer confidence score in the region, Hong Kong and Japan have recorded high levels of consumer optimism. Confidence in Hong Kong (88.5) continues to soar from both six months and a year ago, with a significant increase in domestic consumption boosting the outlook. Japan (68.9) continues to shine, with consumer sentiment on three of the five economic indicators – employment, the economy and the stock market – further improving from six months ago.
“Overall, the volatility in the global equity market, and concerns over inflation and high world oil prices form the backdrop to current consumer confidence. Adding to that are market specific concerns that affect consumer confidence in the individual markets, either positively like Japan, the star performer this time round which has gone from strength to strength, or negatively for markets such as Australia,” Dr. Hedrick-Wong added.
Around the region, the MasterIndex of Consumer Confidence survey found Japan’s consumer confidence score has continued to grow from 63 basis points six months ago to 68.9, lending further credibility to a sustainable recovery, boding well for the Japanese consumer market.
Hong Kong was the star performer, registering a record high score of 88.5 basis points. If not for sentiments towards the Stock Market, which is affected by global stock markets, Hong Kong’s score would have even been higher.
Outlook on the other 4 factors are strongly optimistic, led by Economy (93.8) and Employment (93.5).
In China, while there has been a significant improvement in the outlook for the Stock Market (70 vs. 53.9 six months ago) in China, sentiments on Employment (55.5 vs. 78.9 six months ago) have weakened significantly, bringing down China’s consumer confidence score slightly (78.2 vs 82.3 six months ago), although it still remains high.
Consumer sentiment in Singapore remains strong and relatively unchanged from six months ago (73.9 vs. 74.8), with consumers optimistic on all five economic factors.
While the Stock Market score has been affected by general uncertainty in the global market, the other four economic factors remain robust.
Finally in New Zealand, the MasterIndex was 45.2 basis points, a slight improvement over six months ago (42.5) but the current MasterIndex remains significantly below its historical average of 59.4.
While outlook on Regular Income (85.8) continues to be optimistic, outlook on the Economy (25.2) as well as the Stock Market (28.7) are highly pessimistic and sentiments on Employment (42.7) and Quality of Life (43.5) are pessimistic.
By Kathryn O’Meara
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The MasterIndex & The Region
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MARKETS
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Current
2Q 2006
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Period
Ago
4Q 2005
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Year
Ago
2Q 2005
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Crisis
Average
4Q 97 – 4Q 98
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HISTORICAL
AVERAGE
MASTERINDEX
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Australia
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46.5
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49.8
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56.5
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43.0
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56.9
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China
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78.2
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82.3
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82.3
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55.6
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73.8
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Hong Kong
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88.5
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85.8
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85.5
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16.9
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52.0
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Indonesia
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42.4
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39.0
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70.8
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27.2
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67.5
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Japan
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68.9
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63.0
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45.4
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5.4
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26.6
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Korea
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28.1
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47.5
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54.2
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26.1
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53.1
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Malaysia
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51.4
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68.7
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61.4
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40.9
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75.1
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New Zealand
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45.2
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42.5
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52.5
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38.5
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59.4
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Philippines
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51.9
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28.9
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28.9
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47.7
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49.0
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Singapore
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73.9
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74.8
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69.7
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34.4
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64.9
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Taiwan
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29.1
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26.6
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38.6
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45.1
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49.2
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Thailand
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28.6
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47.9
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60.4
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25.6
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57.4
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Vietnam
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89.6
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93.1
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92.1
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0.0
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91.7
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The Region
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57.4
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57.7
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61.4
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34.7*
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59.7
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