Singaporeans: We're still not spending

Despite a more optimistic economic outlook, Singaporeans are choosing to focus on increasing their savings.

According to a survey by MasterCard, consumer confidence in Singapore has leapt to levels last seen in 2008, as people are approaching the next six months of 2010 with optimism. Consumer optimism jumped to 79.4 on the MasterCard Worldwide Index of Consumer Confidence, more than double the rating taken six months before at 31.2.

The Index is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months based on five economic indicators: Economy, Employment, Stock Market, Regular Income and Quality of Life. The Index score is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral.

However, an accompanying survey showed more respondents looking to save more or at least the same amount in the first half of 2010. (45.8%) compared to six months ago (34.2%). Forty-five percent (45.3%) said they were planning to save the same amount versus 54.4% in the last
survey.

Of those who said they would save more or the same amount in the coming six months, the top reason cited for saving was the need to be prepared for unforeseen emergency expenditures due to an uncertain economic outlook (72.8%). Consumers are also saving for retirement (54.4%), investments (42.9%), purchasing consumer electronics (37.9%),international personal air travel (35.2%) and buying, upgrading or renovating their property (32.1%).

Dr. Yuwa Hedrick-Wong, economic advisor, Asia/Pacific, Middle East & Africa, MasterCard Worldwide said that persistent uncertainty in the economic outlook was still affecting consumers and how they spend, which was likely contributing to a precautionary focus in their spending habits.

Other key economic indicators in this latest survey have shown vast improvements compared to six months ago. Consumers in Singapore are optimistic in their outlook also towards the Economy (89.7 vs. 29.3), Employment (86.5 vs. 24.4), the Stock Market (80.6 vs. 25.0), their Quality of Life (72.7 vs. 43.9) and their expectations towards receiving a Regular Income (67.5 vs. 33.3).

The majority of Singaporean consumers (28.5%) plan to save between 11-20% of their income in the next six months. Twenty-one percent (21.3%) plan to save between 21-30% of their income.

The survey was conducted from 1 October to 9 November 2009 and involved 10,623
consumers from 241 markets across Asia/Pacific, Middle East and Africa. Four hundred
people were surveyed in Singapore.