Consumer confidence down for the second consecutive month in July

Will SG50 celebrations give it a boost?

Consumer confidence in Singapore declined to 126.4 points in July, according to latest data from the monthly ANZ-Roy Morgan Consumer Confidence Index.

Despite the decline, consumer confidence is still clearly above its long-term average of 122.8 but is 9.5pts lower than July 2014’s one-off spike of 135.9.

“Singapore continues to chart a restructuring and reforming path against a global backdrop of increasing uncertainty. Although the dividends of supply side restructuring will ultimately be positive, there can be no doubt that the short term consequence can be confidence-sapping,” said Glenn Maguire, ANZ Chief Economist for South Asia, ASEAN & Pacific.

Maguire expects consumer confidence to recover as SG50 celebrations draw nearer, but warns that a slowing consumer sector can further hurt an economy already dealing with a manufacturing slowdown.

“In the near term, we expect to see sentiment improve as the achievements of Singapore over the past 50 years are celebrated. However, in the medium term, we are less certain on the direction confidence is likely to evolve. If the decline in consumer confidence evolves into a deeper pullback, we will be alert to whether that will translate into softer domestic demand, and eventually into a broader slowdown. At the present time, Singapore’s economic weakness has predominantly been led by the manufacturing sector. A weaker consumer, in that context, would be an unwelcome development,” he said.