KUALA LUMPUR: Malaysian consumer confidence declined sharply in the last quarter of 2014, falling to its lowest level in five years according to a new survey.
The latest Global Consumer Confidence Index from research Nielsen, based on responses from 30,000 online users in 60 countries, showed a ten-point drop in the index for Malaysia, from 99 to 89, making it the least confident Southeast Asian country and well below the global average index of 96.
Confidence declined five points in Indonesia to 120, but this remained the most optimistic Southeast Asian country, along with the Philippines, up five points to the same figure.
Thailand (down 2 points to 111), Vietnam (up four points to 106) and Singapore (down three points to 100) also reported broadly optimistic outlooks.
"Consumers in Southeast Asia continue to be among the most confident nations globally," said Vishal Bali, MD of Nielsen's Consumerisation Practice in Southeast Asia, North Asia and Pacific.
The exception of Malaysia was, he explained, "likely due to consumers feeling the pressure of the introduction of GST later this year and uncertainty around any potential impact on the price of goods and the cost of living."
Malaysians were accordingly reducing their expenditure in certain areas, including clothing, where 65% were spending less, and out-of-home entertainment, where 56% had cut back.
Consumers in other countries were also finding ways to reduce spending – the survey reported that people in Thailand, Indonesia and Vietnam thought their country was going through a recession.
So they were switching to cheaper grocery brands, saving on petrol and electricity usage, reducing holidays and short breaks and delaying upgrades to technology,
"There is a collective sense of debt-avoidance in the region, and this is resulting in subdued purchasing of big ticket items," said Bali.
In the wider Asia-Pacific region, Indian consumers continued to gain in confidence (up three points to 129) to the point where they are now the most optimistic in the world.
In China, the other emerging giant of the region, the index fell four points to 107 in the fourth quarter, after four consecutive quarters at 111.
Confidence also dipped in the developed markets of Australia (down four points to 93), Japan (down four to 73) and South Korea (down four to 48).
Source: Nielsen, Mumbrella Asia; additional content by Warc staff