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01 July 2008
Bangkok
Consumer confidence in Thailand has fallen to its lowest level since 2005 and 81 percent of Thai online consumers think the country is currently in recession, according to the Nielsen Global Consumer Confidence Index, which measures consumer confidence, major concerns and spending habits in 51 markets.
The latest Thai Consumer Confidence Index has dropped from 92 in December 2007 to 87 this time round, representing the lowest level in the last three years, while globally the Nielsen Confidence Index has also recorded the largest single drop since its establishment in 2005. “Consumer confidence fell in 39 out of 48 countries - including Thailand - in the past six months, with New Zealand, USA and Latvia suffering the deepest declines,” said Chantira Luesakul, Managing Director of The Nielsen Company (Thailand) Ltd. Among the 39 markets recording a decline in consumer con fidence, 15 fell by double-digits.
“The last six months have been the most turbulent period for the global economy in several decades. When the USA sneezed at the outset of the sub prime disaster nearly a year ago – the rest of the world caught a cold. No regions or countries have been spared the domino effect of the US sub-prime and credit crisis.”
“Consumers around the world are struggling with the same global issues that are impacting their daily lives. It’s an unfortunate pendulum. On the one hand we are seeing soaring global oil prices, rising commodity prices which are impacting grocery prices, rising interest rates and increasing inflation. This is happening in tandem with falling property prices, weakening labor markets, decreasing industrial output levels and growing unemployment rates which have all resulted in less spending power for the average person. Overall, it’s not a good picture,” commented Chantira.
Globally, Norway has topped the global index with an Index of 129 followed by India (with an Index of 122) and Indonesia & Denmark (both with an Index of 120).
The most remarkable drop in confidence in the world came from New Zealand, which plunged a staggering 18-point, while Taiwan bucked the global trend of economic gloom, posting a buoyant 14-point increase in Nielsen’s Consumer Confidence Index in the past six months, up to 83 from 69.
Thais pessimistic over local job prospects
72 percent of Thai consumers believe that job prospects over the next 12 months would be “not so good (66%) and bad (6%) ” and half were not confident about the state of their personal finances for the next year.
Saving continues to be the main priority for Thai consumers
When asked about their spending intentions, 69 percent of Thais believe that now is “not so good” or even a “bad” time to buy things they want over the next 12 months. After covering essential living expenses, putting money into Savings continues to be the priority for 65 percent of Thai consumers, ranking second in the world after Singapore (69%) for putting money aside for a rainy day. Additionally, four percent of Thai consumers claim to have no spare cash.
Besides Saving, Vacations (52%), New Technology (34%) and New Clothes (33%) were the three most popular spending options for Thai consumers. It is interesting to note that Thai consumers lead the region with most people wanting to invest in Retirement Funds (25%)
The Economy" the major concern
Across the world, Thai consumers ranked among the world‘s top 10 most concerned about the economy (52%) and political stability (22%). When asked what their biggest worry would be in the event of an economic downturn, 67 percent said political instability and 48 percent cited both unemployment and inflation.
In recession now, or heading that way
Thai and South Korean consumers topped the regional rankings for believing their own market is currently in a recession, with a staggering 81 percent of consumers laying claim to economic gloom in their local market. However only 30 percent of Thais and 18 percent of South Koreans believe the situation will escalate into a full-blown global recession in the next year.
“Consumers have many reasons to feel pessimistic right now and the stark reality is that there’s not much out there to feel optimistic about. It’s not surprising that three in five (56%) global consumers and 42 percent of consumers in Asia Pacific think their country is currently in a recession. “Even if their country is not officially in recession and has not recorded two quarters of negative growth – the snowball effect of the credit crunch and rising inflation has taken its toll and officially or otherwise – they certainly feel like they’re in recession,” said Chantira
Work/life balance just as important as economic factors
In these times of economic doubt and recession, the discrepancy between working and living has come to the fore. 19 percent of consumers in Asia Pacific voted work/life balance their biggest concern for the next six months, almost on par with the level of concern for the economy (20%) led by China (42%), Vietnam (41%) and Indonesia (38%). At the other end of the scale, the Nielsen survey found Thai consumers (20%) the least concerned about work/life balance. It is interesting to note that Thailand lead the region with most people concerned about Global Warming (23%) followed by India (16%) and Australia (13%) respectively.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com
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