Rattled consumers beef up savings amidst growing uncertainties

The number of residents pledging to save spare cash rose from 68% to 72% in Q2.

The increasingly dismal market environment has seen a growing number of Hong Kong residents stepping up their saving activities to prepare for the rainy days as the number of residents pledging to save spare cash after covering essential expenses rose from 68% to 72% in Q2, according to the Conference Board Global Consumer Confidence Survey conducted in collaboration with Nielsen.

Also read: Half of Hong Kong workers have insufficient savings

The survey also revealed that there are slightly less number of consumers who have expressed growing willingness to spend from 56% in Q1 to 54% in Q2. The development is in line with a slightly lower showing on the Consumer Confidence Index which fell from 107 in Q1 to 105 in Q2.

“The drop of Hang Seng Index (HSI) causes impact on consumer confidence and spending, with more people tend not to spend spare cash and put them for saving,” Nielsen said in a report.

The 5% drop in the HSI in Q2 resulted in reduced sentiment to invest in shares, stocks or mutual funds. Consumers also reduced discretionary spending on items such as vacations, out-of-home entertainment and new clothes.

Also read: Retail sales growth slow to single-digits in July

“Although the business environment in the second quarter of 2018 has been positive, Hong Kong’s economy is expected to be affected by instability in the global economy,” Michael Lee, Managing Director, Nielsen Hong Kong and Macau said in a statement.

The quarterly survey serves as an indicator of consumer sentiment, measuring consumer perceptions about local job prospects, personal finances and spending intentions, covering more than 32,000 respondents across 64 markets.