A previous article by InsightAsia, a market research agency that specializes in the Asia Pacific region, described how consumer confidence in Indonesia has developed positively from the first to the second quarters of this year. This latest report broadens the scope to include other countries which are also now enjoying similar trends.

These positive indicators on consumer confidence in Indonesia are also being found in other countries surveyed. The Consumer Confidence Index of Indonesia according to InsightAsia is now showing similar results to that of Malaysia.

Both countries have moved up from a somewhat negative view to just below the neutral level of 100 according to this new index. The  rating for Indonesia increased from 83 to 97, and for Malaysia from 83 to 94. Singapore was the most negative country in the first quarter, with an index indicator of only 62, but boosted its consumer confidence by 26 points to 88 in the second quarter, leaving Thailand at the bottom of the consumer confidence list. Thailand has increased its index only marginally, by 6 points from 72 to 78, reflecting the specific local conditions.

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Consumers in Indonesia and Malaysia are similar in their optimism about the future, expecting the economy and their financial well-being to improve.

However there are differences too. Indonesian consumers feel neutral about the current state of the economy, while Malaysians are negative. On the other hand, Malaysians are more positive about their current financial well-being.

Consumers in Singapore are less optimistic about the future than those in Indonesia and Malaysia. Though Singaporeans have become less negative about the economy than they were in the first quarter, they don’t expect recovery in the coming year and also don’t expect their financial well-being to improve.

Even though consumers in Singapore have boosted their confidence since the first quarter, they are still more negative than Indonesian and Malaysian consumers.

Thailand has achieved a smaller increase in consumer confidence than Singapore, Indonesia and Malaysia. Thai consumers overall are not dissatisfied with their financial well-being, but they are very negative about their economy and don’t expect recovery in the near future or the next year.

In addition to the continuing effects of the global recession, Thailand is also clearly suffering from the negative impacts of political instability which are affecting consumer confidence.

Violent demonstrations have received worldwide media attention, quite possibly changing the perspectives of some potential tourists and investors, encouraging a proportion of them to stay away and seek other destinations.

Despite these problems Thailand has increased its Consumer Confidence Index by a modest 6 points compared to the first quarter of 2009, but cannot keep up with the more robust improvements  in confidence in Indonesia, Malaysia and Singapore.

China is included in the survey for the first time in the second quarter. Chinese consumers are in a different state of mind than those of the other four countries.

Their Consumer Confidence Index is higher at 123. Consumers are positive about the present state of the economy and its outlook, as well as their financial well-being.

However an important indicator of consumer confidence is the willingness to buy durable consumer goods. Consumers in Indonesia, Malaysia, Singapore and Thailand all indicated in this survey that this is a bad time for such purchases.

This demonstrates that even though confidence is increasing and consumers in these countries have become more optimistic about the future, they are still reluctant to commit to major purchases.

China is the only of the five countries in the survey where consumers feel it is a good time to buy major household items.

Recent economic reports show signs of recovery for the  Southeast Asian economies. Analysts refer to public spending and regional and domestic consumer demand as the key drivers behind these trends. Asian consumer confidence is an important indicator of consumer demand and though the recession is not over, the results for the second quarter of the Asian Consumer Confidence Index are encouraging.


The writer is Head of Consumer Confidence Index at InsightAsia Research Group. He can be contacted for more information about the report at consumerconfidence@insightasia.com

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