Thai consumer confidence down 3% in Q2

The overall Thai CCI dropped by nearly 4 points from 106.9 in the first quarter to 103.5 in the second. However, not everything seemed to be gloomy in Thai consumers’ eyes. About two-thirds (66 per cent) believed job prospects in the country were good to excellent, while 65 per cent trusted that their personal finances in the next 12 months would be positive.
While 65 per cent still believed that the country was in recession, that represented a drop from the previous quarter by 3 per cent.
Three out of 10 Thais (28 per cent) believed the country would get out of recession within a year – the same as in the previous quarter.
Suresh Ramalingam, managing director of Nielsen Thailand, said: “The slight drop in consumer confidence is expected.
“Continuing economic uncertainty is clearly impacting on consumers’ confidence levels not only in Thailand, but across the region. Global events, including a worsening euro-zone crisis and slowing growth rates in China and India, posed an overall impact to financial markets and consumer sentiment.”
The top three main concerns among Thai consumers in the second quarter saw a massive shift. Although the economy remained the biggest worry (34 per cent), the number of Thais who found the issue most troublesome decreased by 24 per cent compared with the previous quarter.
In contrast, concerns over increasing utility bills surged by a staggering 100 per cent, making that issue the second most worrisome for Thais (24 per cent). Job security (18 per cent) and debt (16 per cent) were a distant third and fourth.
“The increase in the Ft charge [fuel adjustment tariff] by 30 satang seems to have significantly affected Thai consumers’ sentiment, resulting in the surge of concerns over increasing utility bills. However, we believe that this trend is temporary and most likely will wear off after the Ft increase [freezes] in August,” Suresh said.
According to NM Incite, Nielsen’s social-media listening platform, a spike in online conversations regarding electricity bills during May and June was clearly observed.
Signs of consumers tightening their belts were also indicated in the survey. Six out of 10 Thais (61 per cent) believed this was not a good time to purchase things they desired, while 17 per cent more (31 per cent) consumers, compared with the previous quarter, claimed to have cut their spending on holidays and short trips to spare some cash.
Interestingly, 9 per cent of Thai consumers indicated they had no spare cash left at the end of the month – a staggering increase of 50 per cent compared with the first quarter.
According to the survey, food and beverage took the most of an average monthly Thai consumer’s income: 11.5 per cent on dining out, and 15.5 per cent on dining in. In addition, the quarter saw an increase in dining out and education by 9 per cent compared with the previous quarter, most likely due to the beginning of the school term.
Globally, despite a 3-point decline, Asia-Pacific remained the most optimistic region (99.6), with Indonesia overtaking India as the most confident market in the world (120.1; a score above 100 indicates positive confidence).
China’s consumer confidence decreased by close to 5 points, from 110 to 105.3. Despite a continuous increase of 1 point in the past two quarters, Europe remained the most pessimistic region (73).