Bangkok--Mar 15--MasterCard International
The twice-yearly MasterIndex survey measures consumer confidence in thirteen countries and territories in Asia Pacific. From record lows in the June 1998 survey, the latest set of results show that, with the exception of India, consumer confidence in each of the twelve other markets surveyed is up.
Overall consumer confidence and sentiments on all five economic factors have doubled or even tripled in Thailand. Although the current MasterIndex of 38.5 still indicates apprehension among Thai consumers, the current reading is more optimistic than the previous three MasterIndex readings. In fact the current MasterIndex is even higher than the pre-Asian crisis MasterIndex of 25.3 (Quarter 2 1997). The Thais showed more optimism particularly in the stock market (50, up from 15.7), economy (45.9, up from 18.2) and regular income (40.9, up from 27.2).
In Malaysia there has been a dramatic shift, with the MasterIndex up from its all- time low of 23.8 in June 1998, to 67.6 in the December 1998 survey (the MasterIndex score ranges from 0 most pessimistic, to 100 most optimistic, with 50 denoting a situation of neutrality*). In Korea, the MasterIndex is up from a low of 14.1 in June 1998 to 44.3 in December.
Even India, the only market surveyed not to report a positive shift, moved just three Index points lower from a MasterIndex of 51.7 to 49.3 – maintaining a neutral score.
According to Prithayuth Nivasabutr, Director of member relations and marketing, MasterCard International for Thailand, “The results, which indicate a positive outlook, are the most significant since we began the survey in 1993. There is a clear regional trend. While there is still caution among most consumers around the region (only three markets - China, Malaysia and the Philippines - returned optimistic Index scores) and we’re not back to the levels of confidence seen around the region pre-June 1997, this survey is a clear indication that consumer confidence is returning.”
Other Country Findings Australia’s consumer confidence rose from a record low of 29.3 in June 1998 to 47.1 in December 1998. While still short of its record high MasterIndex of 81.7 in 1994, it is almost back to its pre-Asian economic crisis level of 52.6. Scores on all five economic variables surveyed were up and there is a positive outlook on two key factors in the MasterIndex survey: regular income (66.6) and confidence in the stability of the stock market (48.9). China’s MasterIndex of 54.7 up from 52.1 in June 1998, is the average of the scores in three separate surveys in Beijing, Shanghai and Guangzhou. Beijing’s MasterIndex has improved significantly (from 46.5 to 57.2). Shanghai’s has contracted slightly (61.4 to 56.2), while Guangzhou’s remains practically unchanged ( 47.7 to 46.6). A more optimistic view on the future of the economy (55.2 to 57.1), regular income (57.1 to 62.3) and quality of life (56.4 to 68.7) were key contributors to the improved MasterIndex.
Consumer confidence edged up slightly in Hong Kong (13.1 to 14.4). Just before the crisis began, the MasterIndex read 60.5. Six months after the crisis it fell to 23.3, before hitting its low of 13.1 in June 1998. Employment (6.8 to 9.6), economy (9.5 to 15.2), stock market (21.7.to 22.7) and quality of life (6.3 to 8.3) all saw marginal improvements in the MasterIndex score. The one area that saw a decline was concern about regular income which fell from 21.1 to 16.3.
Although India was the only market to record a decline in consumer confidence, it was only slight, from 51.7 to 49.3. The score was still the fourth highest MasterIndex in the region, indicating consumers believe the status quo will be maintained. A less optimistic outlook on future employment prospects (35.6 to 29.7), regular income (86.8 to 73.6) and quality of life (58.8 to 49.2) contributed to the lower MasterIndex score.
An improved outlook on all five economic factors saw the Indonesian MasterIndex climb from an all time low of 15.3 in June 1998 to 30.6 in the latest survey. However, it is still some way from its record highs of 95.9 and 93.7 in the two surveys prior to the Asian economic crisis. Regular income (20.4 to 54.9), stock market (13.7 to 34.4) and economy (18.5 to 31.2) saw the greatest shifts in Indonesian consumer confidence.
While Japan remains the country with the lowest MasterIndex score in the region, it did show an improvement. Its MasterIndex of 10 is its highest since the start of the Asian economic crisis, when it dropped to 5 in December 1997, and to a low of 1 in June 1998. Improved confidence in the stock market (2.6 to 13.9) and quality of life (0 to 24.4) helped push the MasterIndex score up. It also has to be remembered that Japan has traditionally scored lowly in the MasterIndex with an all time high of only 42.6 recorded in December 1996.
The Korean MasterIndex is second only to Malaysia in terms of improvement. It is the country’s most dramatic MasterIndex positive shift since the survey began, up from 14.1 in June 1998 to 44.3 in December. There were improvements across all five economic variables, most notably in confidence in the stock market (37.3 to 68.3), economy (14.8 to 55.0) and employment (6.7 to 37.2).
Malaysia recorded the highest MasterIndex in the region, leaping from an all- time low of 23.8 in June 1998 to the optimistic 67.6 in December 1998. While still not at its pre-economic crisis highs when it was regularly recording MasterIndex scores in the 90s, there has been a dramatic improvement in consumer confidence since the last survey. The MasterIndex for all five economic variables was up, with stock market (23.3 to 75.3), economy (30.6 to 78.7) and employment (19.5 to 66) all showing notable shifts.
New Zealand’s MasterIndex of 45.3 is almost back to its pre-Asian economic crisis level of 46.5, although still some way short of its all time MasterIndex high of 75.4 in December 1995. The latest turnaround in consumer confidence can be attributed to improvements in confidence in future employment prospects (9.4.to 25.8), the stock market (25.6 to 58.5) and the economy (16.0 to 37.6).
Consumer confidence in the Philippines remained fairly optimistic and continued to be among the highest in the region. The current MasterIndex of 55.7 showed a significant recovery not just from Quarter 2 1998, but from Quarter 4 1997 as well. Filipino consumers are highly optimistic about regular income (87.9). A clear signal that the Filipinos believe they have weathered the worst of the regional crisis: There was a significant increase of the MasterIndex scores across all economic variables from last June, except for quality of life (46.5 compared to 48). Consumer confidence in Singapore, at 34.6, increased but still remains low. The downward trend which began in December 1996 has been reversed for the first time in more than two years. Except for regular income (19.3 vs 30.3), all economic variables registered an increase, notably stock market (48.2 vs 25.9) and economy (40.9 vs 25.4).
In Taiwan, consumer confidence on most economic factors showed a drastic improvement – all factors showed an increase, with the MasterIndex score leaping from June 1998’s 35 to the current 46.2. The Taiwanese remain most optimistic about regular income (62.2) and quality of life (60). However, employment issues (25) and the economy (34.8) continue to concern most Taiwanese consumers.
Prithayuth summarized, “Last year, we indicated that there would be a turn-around in consumer confidence in most Asian markets by the end of 1998, and we are pleased that our forecast proved to be accurate. While Asian consumers still have valid concerns about the future, the latest MasterIndex shows that most Asians have already begun to believe there may yet be a light at the end of the tunnel.” 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. More than 600 million MasterCard(, Maestro(, Cirrus(, and Mondex( cards are accepted at more than 15 million locations worldwide. In 1997, gross dollar volume exceeded US$600 billion. MasterCard can be reached through its World Wide Web site at http://www.mastercard.com.
Contact: Prithayuth Nivasabutr, MasterCard Thailand (662) 260-8572 Udomlux Olarn, Presko Shandwick (662) 273-8800