I personally do not believe consumer confidence is low. This is especially when I look at all the colleagues surrounding me in the office today. Every one of them have just changed to the latest Samsung or iPhone. I am the only one still using an old OPPO for the past 20 months. Do not get me wrong, in 1998, I could feel it all around me. At least half of my colleagues were bringing home cooked food to the office. One ate cream crackers with free tomato ketchup from McDonalds nearly everyday! At that time, everyone told me then that they hope they get to keep their jobs. It was really a big downturn then.
Today, according to Malaysian Institute of Economic Research (MIER), the consumer sentiment index (CSI) has fallen to a new low of 70.2 in the third quarter as current income deteriorates. It also said that shopping plans are now on low gear while job outlook ‘yawns.’ I think the ‘yawns’ here meant nothing to shout about and not about the job market falling asleep. One positive result is that the fear of higher prices has moderated. Of course, what it meant with a lower consumer sentiment is that the consumption numbers would be lowered and this would start to affect the economic growth of Malaysia.
When I was at Bangsar Shopping Centre the other day, there were really fewer people. I was in SOGO yesterday for my gym and the usually packed shopping halls were considered low by SOGO’s standard. I think this may have started to really show in malls. The first thing everyone would start to do when they feel bad times are coming is to reduce spending. Next one would be to reduce even more and that’s why the growth numbers have already started to come down.
This is why the growth numbers should start to show this sign even if Malaysia is still growing for the first 2 quarters of 2015. In the first quarter, the country’s economy grew at 5.6 percent and in the second quarter slowed to 4.9 percent. The expectations from many analysts would be that the growth should be around 5 percent. Anyway, lots of predictions are saying that the worst is far from over. I do not wish to go against them. I also hope they are right so that the market continue to offer opportunities instead of everyone becoming a speculator in both the property market and the stock market. As for how long, I still believe it’s just a phase which will pass. In other words, take a longer term view and invest accordingly. As for those who believe hedging by buying properties outside Malaysia is best, all the best to you too. Happy changing handphones!
written on 28 Oct 2015
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