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Malaysian Consumer Confidence Rebounds Six Points in Q1 2012

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Online Consumer Confidence in Malaysia rebounded 6 points to an index of 107 in the first quarter of 2012 according to the latest global online consumer confidence findings from Nielsen.

Malaysia ranked seventh (along with Thailand) among the 56 countries surveyed in terms of confidence level. Malaysia was at tenth position last quarter.

The Nielsen Global Online Consumer Confidence Survey, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.

Despite global economic uncertainties, domestic-oriented and commodities based manufacturing (commodity prices remain elevated) have cushioned some of the tough challenges in export-oriented manufacturing, said Joan Koh, Managing Director of Nielsen Malaysia and Singapore. On top of that, the construction sector is banking on more projects from the Economic Transformation Programme (ETP) for stronger growth ahead while the services sector continues to be a crucial driver. All these factors coupled with pre-election sentiment have contributed to the rise in optimism in job prospects and personal finances among consumers.

Prospects

Malaysia maintains its position at seventh place among 56 countries in the top ten most optimistic job prospects. Overall, 70% of online respondents in Malaysia rate their job prospects as excellent or good over the next 12 months, up by 6% from three months ago. Optimism towards personal finances increased 2 percentage points to 63%.

One-third of the respondents stated that the coming 12 months will be a good time to purchase items they want and need, the percentage has also risen by 3% as compared to the fourth quarter of 2011.

FMCG

The Fast Moving Consumer Goods (FMCG) market in Malaysia grew by 3.5% in the first quarter compared to the same period last year, said Koh. The first quarter is always impacted by the seasonal festive push-and-pull factor i.e. Chinese New Year. As predicted, February FMCG 2 sales declined due to post CNY impact; however, a rebound of 5.2% month-on-month was recorded during March 2012. In total, 66 categories reported positive growth with nine categories achieving double-digit growth. The trend suggests that the market is in a stable zone, and the next quarter will be crucial in deciding how this years growth build-up will play-out for the FMCG trade.

Debt

Almost one-quarter (23%) of online consumers still consider the state of the economy as their biggest concern compared to the last quarter of 2011, while concern over job security (16%) remained the second biggest concern. Debt resurfaced at the third position (11%) surpassing worries about increasing food prices.

Top strategies to manage discretionary spending: save on utility bills and switch to cheaper grocery brands

Even though fewer online consumers are changing their spending patterns to save on household expenses (83 % vs. 85% in Q4 2011), two out of five respondents claimed they will still continue to reduce the cost of utilities to control household budgets when economic conditions improve, followed by 28% who will still switch to cheaper grocery brands as a strategy to increase their disposable income.

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