Inflation pressure worries locals: survey

Wednesday, April 13, 2011
Issue 1283, Page 4
Word count: 556
Published in: Macau Daily Times

By Poyi (Natalie) Leung

Local consumers have shown little confidence that price levels may decline to enable them to purchase real estate in Macau in the next couple of months, a survey has revealed.

In the findings released yesterday at the Macau University of Science and Technology (MUST), the Macau Consumer Confidence Index (CCI) for the first quarter of 2011 was 83.57 on a 0 to 200 scale, up slightly by 0.94 percent year-on-year but down 1.32 percent when compared to the fourth quarter of 2010.

As the index was less than 100, Liu Cheng Kun, coordinator of the faculty of management and administration of MUST, said the result indicated that local consumers still did not have much confidence at present (the first quarter of 2011) or in the next three months.

The Institute for Sustainable Development (ISD) of MUST successfully communicated with 1,010 Macau residents aged 18 and over between March 17 and March 23 via computer-assisted telephone interviews.

Of the six sub-indices that constituted the CCI, ‘price level’ for the first time dropped below 50, to 49.29. The annual CCI survey was implemented in the last quarter of 2008

Compared to the preceding quarter, the sub-index has further decreased by 3.82 percent, showing that local people felt ‘inflation pressures have intensified,’ Liu said.

Examining the ‘expectation index’ that indicates the interviewees’ confidence in the second quarter of the year, ‘price level’ went down by 3.55 percent to 46.73, which Liu said suggests that local people expected prices would climb further in the near future.

Correspondingly, the expectation index of living standards dropped 0.67 percent to 89.81.

Nevertheless, the lowest sub-index was ‘home purchase’ at 49.12, a decline of 3.46 percent over the fourth quarter of 2010.

Liu said it showed that consumers ‘lacked confidence and will’ in purchasing a house.

‘Stock investment’ reported the biggest decline of 6.72 percent among all the six sub-indices when compared to the preceding quarter, to 88.02 in the reporting period.

However, the employment situation in the territory seemed to have continued to improve, since the related sub-index scored the highest point in the survey and went up by 2.88 percent to 113.02.

‘Local economy’ was the other sub-index that was reportedly over 100 for seven consecutive quarters, at 109.31 during the first three months of 2011.

According to Liu Cheng Kun, although the US’ quantitative easing policy has facilitated the recovery progress of the economy, it has triggered inflation which may continue to grow around the world due to “Europe’s debt problem, political situation in the Middle East and North Africa, and also the impacts of Japan’s earthquake and reconstruction works”.

The combination of “multiple uncertain factors” would reinforce consumers’ expectation that price level would continue to soar, Liu pointed out.

The professor believed that under current economic conditions, it is more important to “stabilise price expectations than current prices”, or otherwise people may “lose confidence in savings and local currency as well as the will to find a job”.

During the press conference at the MUST library yesterday, the findings for mainland China, Hong Kong and Taiwan were also announced, with the CCI being respectively 93.1, 81.8 and 73.4.

ISD director Chan Lai Kow reiterated that the results cannot be compared directly with each other, since the survey questions were not completely the same and their cultures and societies are different.

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