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The first quarter consumer confidence survey 2011 released by the Bauhinia Foundation Research Centre (BFRC) today reflected a worsening of consumers’ expectations and confidence in the prospects of the local economy, compared to the findings of the previous survey.
The BFRC commissioned the Public Governance Programme of Lingnan University to interview over 1,000 respondents in a telephone survey between 21 and 27 March 2011.
The Bauhinia Hong Kong Consumer Confidence Index (BHKCCI) - an index of consumer confidence over economic expectations and behaviours in the next three months – was 108.8 in March this year, lower than the index value of 118.9 in the previous survey in December last year.
Consumer expectations of economic conditions over the next 12 months have also deteriorated, as reflected in the fall of the Bauhinia Hong Kong Consumer Expectations Index (BHKCEI) from 92.1 in December 2010 to its record-low of 86.8 in March 2011.
Commenting on the findings, the BFRC Chairman Anthony Wu said, “It comes as no surprise that consumers have become more pessimistic about the economic outlook in the aftermath of Japan’s earthquake and tsunami, which fell in our survey period.
“Another clear indication is increasing pessimism about property purchase and investment in financial products in the short-term future, which we believe can be attributed to a chain of recent global events, including anticipation of interest rate hike, Japan’s natural and nuclear disaster as well as the political unrest in the Middle East.”
However, consumers have not been too gloomy about specific economic activities, especially with regard to employment situations as well as expenses on daily necessities and large item purchases.
“It is true that the index values of consumer expenses on daily necessities and on large item purchases have deteriorated. But taking into account the seasonally high consumption pattern of the previous quarter (Christmas time and 2011 New Year), there is not much difference between the latest survey data and that of the previous surveys.” Mr Wu added.
Detailed findings of the survey are as follows:
• On Hong Kong’s overall economic conditions, respondents’ current perceptions have significantly worsened, while their expectations for the next three months have worsened very significantly and those for the next 12 months have worsened.
• Respondents’ current perceptions of Hong Kong’s employment situations have improved slightly. Their expectations for the next three months have worsened, while those for the next 12 months have worsened slightly.
• Respondents’ current situations of household incomes have remained unchanged, while their expectations for the next three months and the next 12 months have worsened slightly.
‧The employment situations of respondents’ family members over the past three months and their expectations for the next three months have been at par.
• Property purchases by respondents’ families over the past three months and their expectations for the next three months have worsened significantly.
• Respondents’ expenses on daily necessities over the past three months have remained unchanged, while their expectations for the next three months have worsened significantly.
• Respondents’ spending on non-recurrent large purchases over the past three months has worsened significantly, while their expectations for the next three months have worsened.
• Respondents’ investment in financial products over the past three months and their expectations for the next three months have worsened significantly.
This two-part consumer confidence survey was the eighth quarterly survey commissioned by the BFRC since June 2009. Questions in the first part of the survey are related to respondents’ perception of Hong Kong’s overall economic conditions, Hong Kong’s employment situations and respondents’ household incomes in three timeframes (i.e. the current situation, the next three months and the next 12 months). Questions in the second part are related to respondents’ various economic and consumption behaviours for the past three months and the next three months.