SINGAPORE'S consumer confidence remained on the downtrend for the second straight month in October, according to a monthly survey by ANZ and Australia-based market research Roy Morgan Research.
The ANZ-Roy Morgan Singapore Consumer Confidence Index for October slipped 4.6 points month on month to 125, following a 0.9-point month-on-month drop in September.
But the index remains above its long-term average of 123.5 and is 4.8 points higher than it was a year ago. Overall, respondents said they are less optimistic about personal financial conditions and have scaled back plans to buy big-ticket household items.
"The sharp fall in consumer confidence over the month of October was largely driven by a gloomier assessment of current and expected personal financial conditions," said Glenn Maguire, ANZ chief economist for South-Asia, Asean and Pacific.
"However, it is important to note that this growing pessimism extends to the responses to all five survey questions. The Singapore consumer is evidently not immune to the near-recessionary conditions in the local economy, which narrowly averted a technical recession in Q3, and in response to which the MAS had delivered a token easing on Oct 14."
In terms of personal finances, 26.9 per cent of the respondents in October (down 6.9 percentage points from September) said their families are better off financially than a year ago. This marks the lowest point on the indicator since October 2014. Meanwhile, 8.9 per cent (down one percentage point month on month) said they are worse off.
The number of respondents who expect their families to be better off financially in a year's time fell to 32.8 per cent, down 5.6 percentage points from September, marking the lowest level since February. On the other hand, 6.4 per cent (almost unchanged from a year ago) expect to be worse off, the highest recorded since February.
When thinking of future economic conditions in Singapore, 51.1 per cent of respondents expect the country to have "good times" financially over the next 12 months, down 4.5 percentage points from September, while some 11.1 per cent (down 1.6 percentage points) expect "bad times".
Over the longer term, 48.8 per cent (down 3.2 percentage points from September) of the respondents expect Singapore to have "good times" financially in the next five years but 10.3 per cent (down 1.6 percentage points) expect bad times.
The number of respondents who felt now is a good time to buy major household items dipped to 19.9 per cent (down 4.2 percentage points) while 17.6 per cent (up 2.5 percentage points) felt it is a bad time to do so.
Mr Maguire noted that the growth outlook has also dimmed as persisting cyclical headwinds are likely to weigh on Singapore's external-oriented sectors. Meanwhile, domestic conditions are not providing a good buffer at this stage as higher rates might weigh on mortgage repayments.
"The confluence of external and domestic headwinds suggests that local consumer confidence is more likely to soften, then strengthen, in the coming months," he said. "A similar dynamic should thus be expected for domestic demand. As a result, Singapore is likely to remain perilously close to a technical recession in the subsequent months."