CONSUMERS have become only marginally more optimistic about Singapore's economic conditions and their financial positions, according to the latest ANZ-Roy Morgan Singapore Consumer Confidence Index. (see infographic)
The latest index, released on Wednesday, rose slightly by 0.9 points to 121.8 in December, and is now just above the 2014 average of 121.1 points, showing expectations of a rebound.
"The Singaporean consumer has found a slight spark to end 2014 on a slightly more optimistic tone, but the granularity of our survey data hardly suggests a rebound in consumer confidence is in the offering. Indeed, consumer confidence has finished a rather ordinary year pretty much sitting close to its average," Glenn Maguire, ANZ chief economist (South Asia, Asean & Pacific), said.
Despite this, there were signs to show that consumers are optimistic about the next five years, more so than they are about the present economic and financial standing or they were of the last one year.
As for economic conditions in Singapore going forward, just under half of respondents (unchanged at 48 per cent) expect Singapore will have "good times" economically over the next 12 months, compared to just 11 per cent (down 2 percentage points) who expect "bad times" economically. In terms of personal finances, 27 per cent (unchanged) say their families are "better off" financially than a year ago compared to just 11 per cent (down 2 percentage points) that say they are "worse off" financially. Thirty-one per cent (up 2 percentage points) of respondents say they expect their families will be "better off" financially in a year's time compared to only 8 per cent (up 1 percentage point) who expect their families will be "worse off" financially.
Over the longer term, 45 per cent (unchanged) expect Singapore will have "good times" financially during the next five years and only 9 per cent (down 2 percentage points) expect "bad times" financially.
"The good news (as it is Christmas!) that we extract from the survey is that the forward-looking responses are more favourable than the backward-looking assessment. We would thus hope that 2014 proves to be a trough in Singaporean confidence," Mr Maguire added.
He pointed out that although only 27 per cent of Singaporeans believe they are financially better off now than they were a year ago, 31 per cent believe they will be better off in the coming 12 months. The other glimmer of hope, he said, is that whilst an unchanged proportion of Singaporeans expect Singapore to have "good times" economically in the next twelve months (48 per cent) and financially over the next five years (45 per cent), the number who expect "bad times" for each has declined by 2 percentage points.
However, the index also showed consumers continued to be cautious of the level of their spending even though they were more optimistic with only 17 per cent (down 1 percentage point) saying now is a "good time to buy" major household items. On the other hand, 20 per cent (up 2 points) say now is a "bad time to buy" major household items, leading to the Australian bank to be cautious in its assessment of how much confidence could increase going forward. "The optimistic conclusion would be that Singaporean consumer confidence could be in the process of basing, and 2015 may prove to be a more constructive year. We will reserve judgement for now, as significant challenges such as supply-side restructuring and downward pressure on property prices remain high hurdles for confidence to overcome in 2015."