But fears over food prices grow

The consumer confidence index for the third quarter in the city hit a two-year high of 103 points, according to the latest survey results released Tuesday by Nielsen.

The results were driven by a largely upbeat outlook on the local job market. However, fears about rising food prices are looming large in the minds of consumers.

The consumer confidence index in Hong Kong has increased a total of 33 points since March 2009. The latest survey, which was conducted between September 3 and September 21, 2010, showed that 78 percent of Hong Kong consumers said that they are no longer in recession, up 10 percentage points from a year ago.

Nielsen's Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 26,000 Internet users in 53 markets.

"Hong Kong consumer confidence is driven by a more positive outlook on job prospects in the market," said Oliver Rust, managing director at Nielsen Company Hong Kong. He added that unemployment figures have stayed steady at 4.2 percent in the August to October period, while the stock market, property market and tourism numbers have all made progress. Rust expects the city's economic outlook to remain sanguine for the rest of the year.

According to the Nielsen survey numbers, the amount of people who regard their job prospects as "excellent/good", jumped 21 percent from last year - it has now reached its highest level since late 2008 when the financial crisis broke out.

Although consumer confidence in Hong Kong is gathering momentum, there are still concerns.

According to responses collected in the survey, the economic situation (37 percent) and work/life balance (37 percent) were the joint top concerns for the next six months, followed by health (30 percent) and increasing food prices (18 percent).

"Increasing food prices is a key concern for consumers, especially with the dramatic increase of raw material prices on the mainland and across the region," said Rust. In Asia Pacific, one in five consumers are most concerned about rising food prices, an increase of 13 points compared with the second quarter.

According to the latest figures from the Hong Kong government, the city's consumer price index gained 2.6 percent in September from a year ago. The underlying inflation rate in September stood at 2.2 percent, up 0.3 percent from August, because of rising private housing rents and food prices.

Prices monitored by the Hong Kong Consumer Council has revealed that food prices registered double-digit surges in various markets over the past few months. For example, at a market in Wan Chai, the price of fresh lean pork increased to HK$33 per catty on November 1, up 26.9 percent from the end of June's HK$26 per catty. Over the same period, the price of large white cabbages increased from HK$6 per catty to HK$7.3 per catty, a rise of 21.7 percent.

China Daily

(HK Edition 11/17/2010 page3)