Posted on 02 Jul 2009
Singaporeans are getting more optimistic about the future, with fewer planning to cut back on their spending, a survey has shown.
The latest MasterCard Worldwide survey on the purchasing priorities of 401 consumers here found 41 per cent would cut back on discretionary spending in the next six months.
This was in contrast to the previous survey conducted in September last year — when the world financial system began its plunge — which found 64 per cent were going to spend less over a one-year period.
Priorities have shifted a little too.
Singaporeans are still making dining and entertainment a top priority.
However, in second place, perhaps reflecting the effect of retailers' price-slashing, is fashion and accessories, replacing fitness and wellness.
Personal travel remained in third place.
The melting of unease is somewhat in line with recent economic data from the Department of Statistics, which showed that Singaporeans have started spending more on smaller-ticket items such as food and clothes.
Retail sales, when excluding motor vehicle sales which make up about a third of spending, showed a 3.3 per cent and 1.1 per cent month-on-month increase in March and April, respectively.
MasterCard's economic adviser, Yuwa Hedrick-Wong, believes most of the contraction in the economy has impacted foreign workers and foreign professionals.
“The government also moved fast on income support in the beginning of the year, so that helped in consumer confidence,” he added.
Other economists have their own theories.
Alvin Liew of Standard Chartered said it could be due to Singaporeans' “very significant” savings tiding them over, while Action Economics' David Cohen noted that the labour market was not as badly hit as compared to the contraction in gross domestic product (GDP).
“People are not quite as fearful compared to September. We've probably seen the worst already,” said Cohen.
Hedrick-Wong believes that smaller-ticket spending will continue to rise well into next year, while Liew says positive GDP growth will be seen by year's end.
But while consumer confidence is likely to inch upwards, it remains to be seen just when the economy and consumer spending will be buoyant again, say analysts.
