SINGAPORE - Consumer confidence in Singapore continued to climb in May with respondents more upbeat about both their current and future financial state, a survey showed on Wednesday.
The ANZ-Roy Morgan Singapore consumer confidence index rose 4 points to 129.7 last month, now clearly above its long-term average of 122.2, and at its highest since July last year.
The rise was driven by greater confidence across all components of the survey.
"Singaporean consumer confidence has now risen for three months in a row and we find our own confidence perhaps starting to drift slightly upwards as well," said ANZ chief economist for South Asia, Asean & Pacific, Glenn Maguire.
"Indeed, taking a longer run view of our consumer confidence series, it has been broadly tracking upwards from its low in early 2014, a dynamic matched by the improvement in retail sales over that same period. Encouragingly, the slope of the consumer confidence index has steepened in recent months suggesting that the consumer confidence recovery may be gaining traction."
Developments in May such as a further reduction in electricity tariffs and a fall in holiday travel costs (with the removal of airline fuel surcharges), a one-year road tax rebate and a reduction in the concessionary foreign domestic helper levy are all likely to have boosted sentiment on disposable income, said Mr Maguire.
"Certainly when coupled with falling fuel prices, this could be quite a supportive dynamic for consumption," he said.
He added that the the strongest indication that consumer confidence is moving to a firmer footing is that the number of respondents expressing confidence on the 12-month and 5-year outlook has now moved above the 50 per cent mark.
But Mr Maguire added that with consumption only accounting for one-third of Singapore's GDP, overall confidence and household spending will track the evolution of the economy.
"With this in mind, improving confidence should be noted, but exuberance on the outlook should clearly be avoided," he said.
Survey's 5 key findings for May:
1. In terms of personal finances, 31 per cent (up 2 percentage points over previous month) of respondents said their families are better off financially than a year ago compared to just 8 per cent (unchanged) that said they are worse off financially.
2. 35 per cent (up 2ppts) said they expect their family to be better off financially in a year's time - the highest for this indicator since July 2014 - compared to only 4 per cent (down 2ppts) that expect to be worse off financially in a year's time, the lowest for this indicator since July 2014.
3. Thinking of economic conditions in Singapore over the next 12 months, just over half of respondents, 51 per cent (up 2ppts) expect Singapore to have good times financially over - the highest for this indicator since July 2014.
This compares to just 8 per cent (down 1ppt) that expect "bad times" financially (the lowest for this indicator since July 2014).
4. Over the next five years, 53 per cent (up 5ppts) of respondents expect Singapore to have good times financially (the highest for this indicator since July 2014) and only 8 per cent (unchanged) expect bad times financially.
5. 20 per cent (up 2ppts) of respondents say now is a good time to buy major household items while just 13 per cent (down 5ppts) say now is a bad time to buy major household items - the lowest ever recorded for this indicator.