Bangkok--Aug 20--MasterCard International
Thais bounced back by a massive 273% from one year ago to record one of the highest year-on-year lifts in optimism in the latest MasterCard MasterIndex of Consumer Confidence. The boost in Thai confidence was mirrored generally across the region with most Asians now believing the region is back on its feet again just two years after the onset of the Asian economic crisis.
The MasterIndex survey measures consumer confidence in 13 countries and territories in Asia/Pacific. The results of the latest survey* showed an overwhelmingly positive outlook and in some markets consumer confidence levels are how higher than before the crash.
Across the region, the most optimistic consumers are the Malaysians (89.3), Singaporeans (84.5) and Indonesians (82.1). The various economic and political developments in these countries have seemingly contributed to the improved consumer confidence.
Interestingly, two of the markets most affected by the crisis last year, Thailand and Korea, are today enjoying high consumer confidence. The Korean MasterIndex is currently at 77, compared to last December's 44.3 and pre-crisis (December 1996) levels of 43.7. Thailand exhibited similar optimism with last December's index of 38.5 leaping to the current 67.9 - a far cry from a low of 25.3 in June 1997.
"Most media and financial analysts have been declaring these past few months that the region is now back on its feet after the tumultuous economic crisis. A survey like MasterIndex strengthens these perceptions as the survey is supported by quantitative data which clearly indicates that consumer confidence has returned in the region. Recovery has been quicker than expected and not as difficult as predicted and this has seemingly helped invigorate consumer confidence," said Jonathon Gould, MasterCard International Senior Vice President for Marketing, Asia/Pacific.
* see attached factsheet for background and research methodology Country Findings
* Australian consumer sentiment has rebounded to 62.7 from record lows of 29.3 in the June 1998 survey. The current index is also higher than each of the three readings taken just prior to the economic downturn - and over 15 points higher than the last measure taken in December 1998. All five economic factors were up, a finding that has not been manifested since 1994.
* China recorded a MasterIndex score of 63.6, up from the previous 54.7. The current score is the highest obtained over the last three readings. Consumers from Beijing, Shanghai and Guangzhou are optimistic particularly about the quality of life (75.0) and the economy (70.6). However, employment with a score of 40.4 remains the major concern of consumers.
* Hong Kong enjoyed almost a 400% leap in consumer confidence. The December 1998 reading of 14.4 soared to 51.5. Each economic factor improved tremendously, particularly perceptions on quality of life (from previous 8.3 to current 46.7) and employment (from previous 9.6 to current 42.2).
* India bucked the trend across the region with a score of 44.5, the only reading among the markets below 50 (considered a neutral response.) The current score also shows a decline over the two previous readings of 49.3 and 51.7. Indians remain most apprehensive about employment (22.2).
* The recent political and economic developments in the country have evidently made consumers more upbeat about the future as Indonesia made huge strides with a remarkable reading of 82.1 from the previous 30.6. The dramatic increase in each economic factor more than quadrupled, notably in quality of life (14.7 to current 76.5) and employment (17.9 to current 77.1). Indonesians were most optimistic about regular income (86.8).
* Japan has historically received lower MasterIndex scores compared to the rest of the markets, but even the Japanese consumers are enjoying a more hopeful outlook as the December 1998 reading of 10.2 jumped to the current 29.2. The current reading is back to pre-economic crisis levels (June 1997 score was 26.5).
* The Korean MasterIndex reflects the general sentiment that Korea has done an exceptional job in recovering from the economic crisis. The country has made a spectacular turnaround with a reading of 77 - equal to some of the best readings recorded in the history of the MasterIndex. Confidence in four economic factors is even higher than pre-crisis readings. A comparison of current scores with Quarter 4 1996 (pre-crisis) readings shows the astounding rise: Employment (82.6 vs. 11.3), Economy (85.5 vs. 21.7), Stock Market (77.2 vs. 53.5) and Quality of Life (69.2 vs. 54.0).
* For the second time in a row, Malaysia again recorded the highest MasterIndex in the region, moving from the previous 67.6 to a high of 89.3. The individual scores for all economic factors were all extremely high ranging from 86.4 for stock market to 92.0 for economy. Historically, Malaysians have tended to display a generally upbeat consumer outlook.
* New Zealand's MasterIndex score of 59.3 puts the country in the cautiously optimistic category and is a significant improvement over the last MasterIndex reading of 45.3. The only economic factor which consumers are not optimistic about is quality of life (46.8).
* Philippine consumers remain fairly optimistic with a current MasterIndex score of 62.9. The latest reading is a slight improvement over the previous 55.7, but it appears consumer confidence in not yet back at pre-crisis levels (December 1996 score was 83.3).
* There was a huge upswing in Singapore consumer confidence. During the last two MasterIndex reports, Singapore recorded all-time lows of 34.6 (December 1998) and 26.3 (June 1998). The current score of 84.5 is comparable to the market's pre-crisis records. Singaporeans are most upbeat about the economy (94.5) and employment (91.2).
* Taiwan's jump from 46.2 to 57.9 confirms a turnaround in the country's economy, exceeding pre-crisis levels. Sentiment is particularly optimistic when it comes to the stock market (67.3), regular income (66.6) and economy (65.7).
* Perceived to be the hardest hit by the Asian downturn, Thailand has proven its strength in adversity. By all accounts, the country is recovering more rapidly than forecasted last year and consumer confidence has returned. Its latest score of 67.9 is on the same level as pre-crisis levels. The previous reading was 38.5 and the swift economic recovery is reflected in the Thai's confidence in the country's future.
"It is evident that what happens in one country in Asia has a considerable effect on other countries within the region and fortunately this means good news spreads quickly too. When several indicators showed Asia bouncing back from the economic slump, consumers across the region reacted positively. It will be interesting to see if the gains and higher consumer confidence will be sustained in the long term. The MasterIndex has proved to be an excellent barometer of what will happen next," added Gould.
MasterCard International
MasterCard International has the most comprehensive portfolio of payment brands in the world. With 23,000 member financial institutions, serving consumers in 220 countries and territories, MasterCard is the industry leader in quality and innovation. Nearly 700 million MasterCard(r), Maestro(r), Cirrus(r) and Mondex(tm) cards are in circulation today. With more than 16.2 million locations, no card is accepted in more places and by more merchants than the MasterCard Card. In 1998, gross dollar volume exceeded US$650 billion. The latest SET specification is available on the MasterCard web site at www.mastercard.com.
MASTERCARD INTERNATIONAL'S MASTERINDEX SURVEY OF CONSUMER CONFIDENCE FACT SHEET
* The MasterIndex survey of consumer confidence is the only one of its kind in the region.
* It began in Quarter 2 1993 and has been conducted bi-annually since.
* There are now 13 countries and territories in the survey: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand.
* The last survey was conducted in June 1999 among a sample of around 400 (total sample of 5453) across the middle and upper income groups in each country.
* The MasterIndex is calculated based upon percentage response figures, with 0 as the most pessimistic, 100 as most optimistic and 50 as neutral.
* It is based upon responses to questions on five economic factors: employment, the economy, regular income, stock market and quality of life.
* The responses are consumers' thoughts on the 6 months ahead (ie. June to December 1999). Data collection was via personal and telephone interviews with the questionnaire translated to the local language wherever appropriate and necessary.
* The survey has a margin of sampling error of plus or minus four percentage points at the 90% confidence level. End.