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Singaporeans cutting back on spending, survey shows
Publication Date : 07-02-2013
A new survey has shown that Singaporeans are likely to spend less in the coming months, amid growing concern about the economy.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions revealed that 64 per cent of the 500 Singaporean respondents will be holding back on spending this year.
This, said Joan Koh, managing director of Nielsen Singapore and Malaysia, is "a likely predictor of a cutback in discretionary spending in 2013".
The survey is done quarterly to measure confidence levels, spending habits and major concerns of consumers.
Singapore is seventh on the Consumer Confidence Index chart for Asia-Pacific, which includes places such as Malaysia, Australia and Hong Kong.
Results from the online survey show that Singaporeans scored an index of 95 in the last quarter of last year, down from 98 in the previous quarter.
This marks the sixth consecutive quarter that confidence has hovered below 100 points. Confidence levels above this mark indicate degrees of optimism, while those below 100 point to pessimism.
Singaporean respondents claimed their biggest fear is unemployment, followed by concerns of an unstable economy. About half of the respondents (49 per cent) are also worried about their job prospects.
As a result, consumers are likely to cut back on discretionary - or non-essential - items such as stock investments, savings for retirement and travel.
Household spending on necessities is also falling, with 63 per cent of respondents indicating that they have already cut back on this category, and will continue to do so. Their top three ways of doing so: spending less on new clothes (55 per cent), switching to cheaper grocery brands (47 per cent), and saving on utilities (47 per cent).
Consumers' pessimism, said economists, could be due to recent news of slower economic growth, high inflation and nominal wage growth. The possibility of a technical recession here, as well as slowing markets in Europe and the United States have dented confidence further.
"Against that backdrop, consumers may be a little bit more careful about spending," said CIMB regional economist Song Seng Wun. "Singapore is hugely dependent on external demand. If global demand for goods and services eases, economic activities in Singapore subsequently cools."
Other countries shared Singapore's caution. The survey, which polled more than 29,000 consumers in 58 countries, found that confidence declined in 33 countries, mostly in Europe.
Developing markets in Asia-Pacific - including India (121), Philippines (119) and Thailand (115) - were more optimistic than developed ones.
Consumers like Chan Chin Hee, 48, are cutting back. The father of two will spend less on new clothes this year and forgo his annual family vacation.
"Those things we need, we buy. We cut down on what we don't need," said the self-employed man.
"You never know. It's best to save, in case there is a business downturn."