The Consumer Confidence Index (CCI) in the cross-strait region, Hong Kong and Macau for the 3rd quarter of 2019 was announced on October 8, 2019. It shows that the overall Hong Kong CCI was 52.8, down 37.3% year on year (YoY) and 32% quarter on quarter (QoQ). This represents the lowest level since the third quarter of 2008, when the index was launched. All sub-indices were measured at 60 or lower, showing that Hong Kong consumers lack confidence in all six economic areas.

Significant drop in four main aspects of consumer confidence

There was a significant decrease in confidence levels in four main areas: employment, living standards, stock investments and economic development.

The sub-index result of Hong Kong people’s confidence in employment was 54.4 (Table 1), a huge QoQ decrease of 40.8%, and a significant YoY decline of 46.5%. The result for the present employment situation was 56.6 (Table 2), down 45.5% QoQ. The sub-index result for employment confidence in the next three months was 52.9 (Table 2), a decrease of 37% QoQ. This indicates that the employment confidence level has fallen drastically. The future index is lower than the current index, indicating that expectations for the employment situation in the coming three months are even worse.

The sub-index result for the standard of living was 59.9 (Table 1). The overall result fell considerably 42% YoY and 39.6% QoQ, making this no longer the area in which Hong Kong people have the most confidence. The result for the current situation was 61.5 (Table 2), a decrease of 44.7% QoQ. Confidence in the standard of living for the next three months was 58.8 (Table 2), down significantly by 35.4% QoQ. This indicates that local consumers have started to worry about their standard of living. The future index is lower than the current index, which indicates that consumers are very pessimistic about the situation.

The overall sub-index for stock investments was 48.5 (Table 1), down 41.4% YoY and 37.1% QoQ. The result for present stock investments was 46.6 (Table 2), a decrease of 38.4% QoQ. Consumer confidence in investing in stocks in the next three months was 49.7 (Table 2), a drop of 36.4% QoQ. These results demonstrate a lack of confidence in stock investments among Hong Kong people from both an absolute and relative value perspective.

The overall sub-index of Hong Kong people towards economic development was 53.2 (Table 1), down 44.1% YoY and 32.8% QoQ, indicating that consumer confidence in economic development decreased significantly from the previous quarter. The result for the present economic situation was 52.4 (Table 2), a huge decline of 41.3% QoQ. The result for economic confidence in the next three months was 53.7 (Table 2), a decrease of 25.9% QoQ, which demonstrates that Hong Kong citizens are worried about the economic situation in the next three months.

Confidence levels in property purchases and commodity prices also fell

The overall sub-index of 40.5 (Table 1) shows that property remains the area in which Hong Kong people have the least confidence. The index fell 20.6% YoY and 20.7% QoQ. The result for current property purchases was 37.1 (Table 2), down 18.1% QoQ. Consumer confidence in property purchases for the next three months was 42.7 (Table 2), down 22.4% QoQ. This demonstrates that consumer confidence in purchasing property was even lower than in the second quarter of 2019.

The overall index for commodity prices was 60.4 (Table 1), representing a decrease YoY and QoQ. Compared to the figures in other areas, the confidence index for commodity prices was the highest. The current index of commodity prices was 54.5 (Table 2), a decrease of 7.5% QoQ. The result for the next three months was 64.3 (Table 2), a decrease of 12.3% QoQ.

The overall results fell considerably QoQ, and were at the lowest level since the third quarter of 2008, when the index was launched, reflecting an overall lack of confidence among Hong Kong consumers. These results are largely due to a decline in residents' confidence in employment, living standards, stock investments and economic development,which is caused by instability in Hong Kong’s political environment in the past four months.

Media enquiries:
Dr Geoffrey Tso Kwok-fai
Associate Head, Associate Professor and Director of the Statistical Consulting Unit
Department of Management Sciences
City University of Hong Kong
Tel: (852) 3442 8568 or (852) 9020 9996

Mr Hu Yijian
Research assistant
Department of Management Sciences
City University of Hong Kong
Tel: (852) 3442 8657 or (852) 6350 2904

Appendix A: Notes for Data Collection

City University of Hong Kong is responsible for the data collection for the captioned investigation. The survey for the CCI in third quarter of 2019 was conducted by telephone interviews from September 2 to 30, 2019. A random sampling procedure was adopted, and 823 interviews were conducted with local residents aged 18 or above. The survey results have a 95% confidence level, and the sampling error is plus or minus 1.5 percentage points.

Appendix B: Notes for the Chinese Consumer Confidence Index

The Chinese Consumer Confidence Index was launched in the first quarter of 2009 and has been released on a quarterly basis since then. The overall consumer confidence score is an integrated index, measuring consumer sentiment about economic development, employment, commodity prices, standard of living, property purchases and stock investments. It reflects the confidence level of consumers in Mainland China, Hong Kong, Macau and Taiwan. The index is jointly compiled by Capital University of Economics and Business, the Central University of Finance and Economics, City University of Hong Kong, Macau University of Science and Technology, and Taipei Medical University.

The Chinese Consumer Confidence Index uses a scale of 0 to 200, with 0 representing “no confidence” and 200 representing “complete confidence”. If the index is below 100, it suggests consumers “lack confidence”, while if it is above 100, it suggests “relative confidence”.

Appendix C: Tables

Table 1. Results of the CCI index (Overall*)

*The overall index is a weighted index that combines the present and expected CCI.

Table 2. Results of the CCI (Present and Expected#)

#Expected results in the next three months

Table 3. CCI in the cross-strait region, Hong Kong and Macau