Are the good times over?

Singapore - Mirroring global consumer confidence trends, confidence levels among Singapore consumers have plunged more than 12 points from 114 to 102 on Nielsen's Consumer Confidence Index for the first half 2008.

However, Damien Duhamel, who is MD Asia for strategic marketing consultancy firm, Kae says, "Singapore is still a young nation and consumers have the tendency to usually feel either all boom or gloom but hardly ever on middle ground."

The index showed consumer confidence in the last six months declined in 39 out of the 48 countries surveyed, with New Zealand, USA, and Latvia faring the worse, while Singapore's 102 points was "by far the lowest recorded level here" since the inception of Nielsen's Consumer Index in 2005, according to The Nielsen Company Singapore's executive director Vicky Santos.

"The last six months have been the most turbulent period for the global economy in several decades. The USA sneezed at the outset of the sub-prime disaster a year ago - and the rest of the world quickly caught a cold. Consumers around the world are inevitably struggling with the same global issues that are impacting their daily lives," Santos, said.

Duhamel reckons Asia and Singapore in particular came out of two extraordinary years of growth and 2008 in comparison now appears to be a bleak year.

"In retrospect, we will tag 2008 as being a 'challenging year' and nothing else. Consumer confidence in Asia seems to easily change. Ask the same question after the first night F1 Grand Prix or after the grand opening of the Marina Sands Casino and moods will swing. Fine, consumers have to live with new oil price realities and some sectors will experience slow downs. But again are these real slow downs or more realistic pricing after a splurge of growth like the property sector has experienced in 2006 to 2007 in Singapore?" he says.

He adds, "Many firms are still heavily investing across Asia in anticipation of a quick rebound. Growth in the region is here to stay. The usual short-sighted approach of cutting down costs and investments in times of turmoil seems to be replaced by a wiser and discreet 'capturing market share and building capacity for upcoming expansion' strategy. Smart and innovative firms have learnt their SARS and bird flu lessons. Growth is always around the corner."

But commenting on the results of the Index, Santos says, "In the face of a 25-year high annual inflation rate and the rising cost of basic necessities - food, petrol, transportation - it would be unrealistic to expect Singaporeans' confidence to be sustained at previous levels."

Only Taiwan bucked the global trend of economic gloom, posting a buoyant 14 point increase in the past six months, up to 83 from 69 points.