New Zealand optimistic about the future

New Zealand is feeling the highest level of optimism in three years, according to the latest Mastercard Index of Consumer Confidence (MICC)*, which is conducted twice a year.

The survey** by Mastercard has upgraded New Zealand’s consumer confidence from neutral to optimistic with a score of 62.2. This is a 6.8 point increase since the previous survey was undertaken six months ago, the first time New Zealand has been classed optimistic since 2014.

The index, which measures the six month outlook on five economic factors including the economy, employment prospects, regular income prospects, stock market and quality of life, is calculated on a scale of 0 to 100, with zero as the most pessimistic, 100 most optimistic, and 50 as neutral.

The latest survey highlighted that New Zealanders are more confident across economic (64.3), employment (64.0), quality of life (52.4) and stock market (56.6) factors. Regular income confidence, the highest measure in the survey, dropped 2.1 points to 73.9.

“It’s great to see New Zealand break into the optimistic group of the survey for only the second time since 2010 – although it’s unsurprising considering New Zealand’s economy has been growing robustly in recent times,” says Peter Chisnall, Mastercard Country Manager for New Zealand and Pacific Islands.

“We’re seeing strong tourism and migration underpin consumer spending, while the housing shortage and Canterbury rebuild have buoyed building activity. And with annual GDP growth of 3.6%, this is not only historically strong, but in the top tier of growth performance across the developed world,” says Chisnall.

More than a third of Kiwi consumers expressed confidence in their future prospects and sense of health security.

“The labour market remains strong, particularly in Auckland, and we are continuing to enjoy high levels economic and political stability. This contributes to an ongoing stable business and social environment which in turn provides Kiwis with the confidence to seek new opportunities,” adds Chisnall.

Internationally, New Zealand’s consumer confidence score is just below the average for the rest of the Asia Pacific region, which came in with a score of 68.1. The country is significantly ahead of neighbouring Australia, which scored 46.5.

New Zealand remains ranked 9th overall, while Australia placed 10th out of the 17 surveyed markets.

Mastercard Index of Consumer Confidence New Zealand – 2H16

Overall MICC 62.2, optimistic; some improvement from six months ago (+6.8)

• Employment 64.0, optimistic; significant improvement from six months ago (+11.4) 
• Economy 64.3, optimistic; significant improvement from six months ago (+12.7) 
• Regular income 73.9, optimistic; stable compared to six months ago (-2.1) 
• Stock market 56.6, neutral; stable compared to six months ago (+1.7) 
• Quality of life 52.4, neutral; significant improvement from six months ago (+10.3)

Hashtag: #MastercardNZ

*The MICC Index score and the five component index scores range from 0 to 100 where 0 represents maximum pessimism, 100 represents maximum optimism and 50 represents neutrality.

**The Mastercard Index of Consumer Confidence survey has a 20-year track record of consumer confidence indices collected from over 200,000 interviews. It is the most comprehensive and longest running survey of its kind in the Asia Pacific region. In June 1997, the index revealed a decline in consumer confidence – one month prior to the devaluation of the Thai baht that triggered the regional economic crisis. In June 2003, the Index score for Employment in Hong Kong dropped to a low score of 20. This was subsequently reflected in Hong Kong’s unemployment rate, which peaked just before September 2003 at 8%.

The survey began in the first half of 1993 and has been conducted twice yearly since. Seventeen Asia Pacific markets now participate in the survey: Australia, Bangladesh, mainland China, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, New Zealand, Philippines, South Korea, Singapore, Taiwan, Thailand and Vietnam.

Between November and December 2016, 8,723 respondents aged between 18 to 64 in 17 Asia Pacific markets, were asked to give a six-month outlook on five economic factors. Respondents were asked five questions pertaining to their six-month outlook on the economy, their employment prospects, the local stock market, their regular income prospects, and their quality of life. The results of their responses were converted in five component indexes which were subsequently averaged to form the MICC score. The MICC Index score and the five component index scores range from 0 to 100 where 0 represents maximum pessimism, 100 represents maximum optimism and 50 represents neutrality.

Investors more confident about FDI placement in Singapore

Singapore is in the top-ten list in the 2016 AT Kearney Foreign Direct Investment (FDI) Confidence Index*. The city-state jumped five places – the biggest rise in rankings - to take the 10th spot in this year’s index.

The index is a forward-looking analysis of how political, economic, by  regulatory changes will likely affect FDI inflows into countries in the coming years. Since its inception in 1998, the study has reliably pointed toward firms’ top choices globally for FDI, with the countries ranked in the index tracking closely with the destinations for actual global FDI inflows.

The index is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations. In this year’s survey, 31% of the respondents said they were more optimistic about Singapore’s economic outlook over the next three years, compared to a year ago.

“Singapore has established itself as a regional financial hub. Its robust economy, stable political environment, corruption free establishment and an educated talent pool have made it an attractive destination for global firms,” said Soon Ghee Chua, Partner and Head of Southeast Asia at global management consulting firm AT Kearney.

“Singapore is consistently ranked as one of the easiest places to do business. That has seen major global companies set up their regional headquarters here. Singapore is also a member of the Association of Southeast Asian Nations (ASEAN) further adding to its lure for companies looking to tap into the 10-nation economic bloc’s growth potential. All of this has contributed to the growth in FDI into the country.”

The results of the index also show that domestic market size, cost of labour, regulatory transparency and lack of corruption are among the top factors that executives look at when making decisions about investing in a country.

Overall, five Asian countries feature in the top-ten rankings in this year’s index, highlighting the confidence global business leaders have in the region:

• China: Ranked second for the fourth year in a row.
• Japan: Continues to rise in the rankings, up one spot this year to 6th place.
• Australia: Jumped three spots to take 7th place.
• India: Jumped two places to re-enter the top 10 at the 9th spot.

The US tops the FDI Confidence Index, holding its first-place position for the fourth year in a row. Global business executives are also more bullish on the US economic outlook than for any other economy. China claimed second place, also for the fourth consecutive year. However, investor expectations about the Chinese economy turned more negative this year, and executives say they will reduce their FDI in China if market volatility persists.

“The US and China have held steady at the top of the index in the face of significant changes in the global operating environment over the past four years,” said Paul Laudicina, founder of the FDI Confidence Index and chairman of AT Kearney’s Global Business Policy Council.

“Executives’ sustained interest in investing in the US and China demonstrates the undeniable and enduring attractiveness of the two largest economies in the world. Over the 18 years of this assessment we have observed consistent investor preference for large markets with robust economic prospects.”

Global executives are increasingly turning to FDI to ignite growth opportunities, despite the overall trend of slowing globalisation. Global FDI flows jumped 36% to an estimated US$1.7 trillion in 2015 - the highest level since 2007 - and the vast majority of executives also believe that FDI will become more important for corporate profitability and competitiveness in the near term. Accordingly, more than 70% of firms in the survey plan to increase their level of FDI over the next three years. A likely reason for this is the rise of protectionist sentiments in many countries - creating greater need for a local presence to do business in those markets.

Interested?

Read past editions of the FDICI

*The 2016 AT Kearney Foreign Direct Investment (FDI) Confidence Index is constructed using primary data from a proprietary survey administered to senior executives of the world’s leading corporations. The survey was conducted in January 2016.

Respondents include C-level executives and regional and business leads. All companies participating in the survey have annual revenues of US$500 million or more. The participating companies are headquartered in 27 different countries and span all sectors. The selection of countries from which to survey senior executives is based on data from the United Nations Conference on Trade and Development (UNCTAD), with the 27 countries represented in the FDI Confidence Index accounting for more than 90% of the source of global FDI flows in recent years. Service-sector firms account for 45% of respondents, while industrial firms account for about 35% and IT firms account for about 15%.

The index is calculated as a weighted average of the number of high, medium, and low responses to the questions on the likelihood of making a direct investment in a market over the next three years. Index values are based on responses only from companies headquartered in foreign markets. For example, the index value for the US was calculated without responses from US-headquartered investors. Higher Index values indicate more attractive investment targets.

FDI flow figures are the latest statistics available from the UNCTAD, and all 2015 figures are estimates. Other secondary sources include investment promotion agencies, central banks, ministries of finance and trade, and other major data sources.

Singapore businesses more confident than Hong Kong, have better work life balance

- Forty-three percent of businesses in Singapore are strongly confident in the growth of their business this year, compared to 30% of businesses in Hong Kong.

-  Sixty-one percent of businesses in Singapore plan to hire more personnel, compared to 44% of businesses than Hong Kong this year.

The Compass Index recently compared business trends between Hong Kong and Singapore that businesses in Singapore are more optimistic and employees enjoy a better work life balance than in Hong Kong.

Based on client surveys, the Compass Index measured business trends in nine different countries in APAC. The respondents come from a cross section of startups, small and medium sized  businesses and multinational companies.

Optimism in business growth

The Index shows that 43% of businesses in Singapore are strongly confident in the growth of their business this year, compared to 30% of businesses in Hong Kong. Singapore is also leading in the Global Financial Centres Index, placing only behind London and New York with regards to business environment, financial sector development and infrastructure.

Both governments have stepped up their efforts to support startups and small and medium sized businesses. In March, the Hong Kong government announced that its 2016-2017 Budget will see measures to support SMEs including tax cuts to injecting [HKD5 billion into the Innovation and Technology Fund (ITF). While the Singapore government has implemented special tax schemes to support newly incorporated companies, in addition to providing a startup cluster,  Block 71,  and research resources. Recently, the government launched SG-Innovate as a one-stop office to boost Singapore’s position as a financial technology hub.

Singaporean businesses are also more decisive in hiring than Hong Kong. The Index shows that 61% of businesses in Singapore plan to hire more personnel, compared to 44% of businesses than Hong Kong this year.

“Singapore and Hong Kong are the gates to Asia. They both offer unique selling points for businesses i.e. for businesses that want to tap the Chinese market, Hong Kong might be the better place; while for businesses that want to focus on Southeast Asian countries, Singapore would be the natural option,” said Andrew Chung, CEO of Compass Offices.

Work life balance

While more than half of people in Hong Kong and Singapore work between eight to nine hours on an average day, the Index indicates that 8% of Hong Kongers work more than 11 hours, compared to 6% of Singaporeans.

More Singaporeans do not bring work home as well. More than a quarter (27%) of Singaporeans have never brought work home, compared to less than 20% in Hong Kong.

Last year a survey carried out by Community Business, a non-profit organisation that is focusing on good business practices in Asia, suggested that more than 60% of 1,000 employees across Hong Kong feel that their work life balance is getting worse.

“Businesses in Hong Kong and Singapore are seen as the frontrunners in the region. So it is important for them to embrace the concept that work life balance is no longer a nice-to-have policy, (but a) pertinent way to encourage hard work and employees’ loyalty, and to stay on top of competition,” concluded Chung.

Body confidence comes with age, says YouGov global survey

A recent YouGov global survey* has found that the majority of adults are happy with their weight and body image, and that body confidence tends to mature with age. The survey also notes that there is concern that celebrity culture undermines the body image of young people in nearly all countries surveyed.

For the US, Australia, and most of the European and Asia Pacific countries surveyed older people are significantly more likely to be happy about their body shape than those in their twenties and thirties.

Of the twenty-five countries surveyed, Indonesians are the most positive about their body image overall, with more than three quarters (78%) claiming they are happy with their body weight and shape. Residents from Saudi Arabia (72%), Oman (70%) and Qatar (70%) are the next happiest with their body image overall.

Men in general are more positive about their weight and appearance than women. Only in Saudi Arabia are women more comfortable with their looks than the men with 74% of Saudi women claiming they are happy with the way they look compared to 70% of Saudi men.

Looking at APAC countries, in Indonesia, only 75% of women are happy with their looks compared to 81% of Indonesia men. In Malaysia, 60% women are happy with their looks while 65% Malaysia men are happy with their looks. In Singapore, the percentages are 62% and 66%; in Thailand it’s 63% and 68%; and in Australia, it’s 58% and 67%. Women in Hong Kong are the least body-confident with only 44% claiming they are happy with their appearance compared to 55% of Hong Kong men.

In seventeen of the twenty-five countries surveyed more than half of responders think that celebrity culture has a negative impact on young people. In Australia 67% think celebrity culture has a negative effect on young people. In Indonesia, 58% think the same. However, people in Singapore and Malaysia are more neutral, with only 43% and 41% think celebrity culture has a negative effect on young people, while in Thailand and Hong Kong, a lower percentage of 38% and 37% response that they think celebrity culture has a negative effect on young people.

In general the countries surveyed in the Middle East and Asia Pacific have a more positive view of the impact of celebrity culture on young people. Around a third in the UAE (34%) and Qatar (31%) think celebrity culture can have a positive effect, along with 41% in Mainland China and over one in three (34%) in Malaysia and Thailand.

*The total sample size was 22,140 adults, surveyed in the US, UK, France, Germany, Denmark, Norway, Sweden, Finland, UAE, Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, Egypt, Chile, Colombia, Mexico, Mainland China, Hong Kong, Singapore, Indonesia, Malaysia, Thailand and Australia. Fieldwork was undertaken between April 28 and May 13 2015. The survey was carried out online. The figures have been weighted and are representative of all adults (aged 18+).