Consumers' lack of confidence shows

Caroline Zheng

Consumers in Hong Kong are losing confidence in the economy, which posted the largest quarterly decline among six sub-indices, a survey by a local university shows.

City University observed a 2.3-percent quarterly decline in the city's overall consumer confidence index in the third quarter to 86.8 on a scale of 200, with a score of less than 100 indicating a lack of confidence.

Faith in Hong Kong's economic development recorded a quarterly drop of 11.3 percent to 87.8 among six sub-indices. For expectations for the next three months' economic growth, the reading stood at 94.7 - a fall of 10.5 percent from a quarter earlier, according to the survey.

CityU, which surveyed 1,000 Hong Kong residents aged 18 or above between August 20 and September 26, also found that Hong Kong customers have the lowest confidence in commodity prices, which stood at only 72.6 in the third quarter despite a 7.4-percent rise from the previous quarter.

Additionally, the sub-indicators for investing in stocks and buying homes were both below 80 for the third quarter.

The sub-index for stock investments came in at 75.7 - down 6.2 percent from a quarter earlier. In terms of confidence levels of property purchases, the sub-index was measured at only 73.4 despite a rise of 2.7 percent from the previous quarter.

As for the employment situation, the sub-index was 102.9 for the third quarter, a drop of 3.3 percent compared to the previous quarter.

However, as the figure was slightly past the 100 level in absolute value, consumers' confidence level in this aspect is considered neutral, the university said.

Among the six sub-indices, Hong Kong consumers have the highest confidence in living standards, which remains almost unchanged quarterly at 108.3 for the third quarter, according to the survey.

This came after the University of Hong Kong cut the city's full-year economic growth forecast by 0.8 percentage points to 3.8 percent, adding that exports will remain a drag on the economy. Its latest outlook is lower than the SAR government's estimates of 4 to 5 percent.