Press Office

Back To Press Office

Sydney, 15 June 2009 – In line with the global economic situation, Australian consumer confidence for the six months ahead has dropped to its lowest in 17 years. The overall score has fallen from 49 index points¹ six months ago to 24 for the six months ahead, according to the latest MasterCard Worldwide Index of Consumer Confidence.

The Index is based on a survey of 21 markets across Asia/Pacific, Middle East and Africa, which measures consumer confidence across five factors: employment, the economy, the stock market, regular income and quality of life for the six month period ahead.

Now in its 17^th year, the MasterCard Worldwide Index of Consumer Confidence is the region's most comprehensive and longest running consumer confidence survey. Released twice a year, the Index is based on a survey which measures consumer confidence on prevailing expectations in the market for the next six months. It is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. The Index and its accompanying reports do not represent MasterCard financial performance.

Australia's Index score of 24 is in stark comparison to China and India, with overall Index scores of 61 and 68 respectively.

"Although Australians are pessimistic about the future state of the economy, the optimism shown by our trading partners and key markets, China and India, are encouraging," says Eddie Grobler, executive vice-president, Australasia, MasterCard Worldwide.

Looking ahead, Australian consumers are much more pessimistic about employment with an indicator score of 9.6 down from 35.5 six months ago. They are also more pessimistic about the economy, decreasing from 42.1 six months ago to 18.3. Australia’s outlook on regular income has halved to 37.1 points (from 62.2 six months ago), making it clearer as to why 42% of Australians surveyed are pessimistic about their quality of life.

"These results show we are viewing employment and regular income in a negative light, which has in turn affected the way we see our quality of life, dropping from 48 for the first half of the year to 14 index points for the six months ahead.

"The economic climate has been tough for everyone across the globe and Australia is no exception. Although the current outlook is bleak, Australia is still more optimistic than neighbouring markets such as New Zealand, Japan and Thailand," said Mr. Grobler.

Dr. Yuwa Hedrick-Wong, economic advisor to MasterCard Worldwide in Asia/Pacific said, "The impact of the global crisis on Asia has been massive, with exports declining steeply in most Asian markets, in some cases up to 40% between the summer of 2008 and March 2009. Currently market conditions continue to be volatile; and a high level of uncertainty persists as to what the future may hold. In Asia/Pacific, there is a sharp divide between markets with consumers sinking into deeper pessimism; and markets where consumer optimism has stood up well in spite of the general deterioration of economic conditions globally and at home.

"In the wider Asia/Pacific region, India in particular stands out, where consumer confidence actually increased compared to six months ago. Chinese consumers remain confident about their future; although the level of confidence has dropped compared with last year. Consumer outlook in Vietnam also remains optimistic, albeit at a lower level as well. It is also worth pointing out that consumer sentiments in Indonesia have turned from negative to neutral for the first time since 2007. These are outstanding results given the prevailing economic environment.

"In sharp contrast, consumer outlook in other Asia/Pacific markets continues to be pessimistic. This sharp divide reflects, to a large extent, the difference in consumers' perception of the strength of their domestic economy, and how well it could weather the global storm. So it is not surprising that economic growth is expected to be positive in real terms in China, India, Vietnam and Indonesia in 2009. Indeed, it is due to these markets that Asia (excluding Japan) is projected to grow by over 5% this year, compared with more than a 3% contraction in OECD countries. Asia thus leads all other regions in the world in growth this year."

• The average consumer confidence score of markets in the Asia/Pacific (38.7) has dipped from six months ago (47.4) and a year ago (56.0), though it is higher than the 1997-98 Asian economic crisis average of 32.3.
• Overall consumer outlook has fallen across the five indicators that make up the Index compared to six months ago: Employment (30.3 vs. 41.2 six months ago), Economy (38.7 vs. 42.1 six months ago), Quality of Life (39.2 vs. 44.0 six months ago), the Stock Market (41.1 vs. 45.5 six months ago) and Regular Income (44.2 vs. 64.3 six months ago). Only three out of the 14 Asia/Pacific markets surveyed – China, India and Vietnam – are optimistic about the second half of 2009. India (68.0) has the highest score among the Asia/Pacific markets, with Indian consumers optimistic about Regular Income (70.0) and Quality of Life (74.5).
• While China (60.8) and Vietnam (60.9) remain optimistic about the second half of 2009, they are less optimistic than they were six months ago (China at 76.6; Vietnam at 88.1).
• Ten Asia/Pacific markets are pessimistic about the second half of 2009, with Singapore (31.2 vs. 62.3 six months ago), Vietnam (60.9 vs. 88.1 six months ago), Australia (24.1 vs. 49.0 six months ago) and Hong Kong (24.7 vs. 41.8 six months ago) recording the biggest decline in confidence scores. Indonesian consumers have turned from pessimism to being neutral in their outlook (49.2 vs. 38.5 six months ago).

Launched in 1993, the long-standing MasterCard Worldwide Index of Consumer Confidence is the flagship program in MasterCard's suite of research properties in Asia/Pacific. The other key MasterCard Worldwide Index research products include the MasterCard Worldwide Index of Consumer Purchasing Priorities, MasterCard Worldwide Index of Consumer Purchasing Resilience, the MasterCard Worldwide Index of Women's Advancement, the MasterCard Worldwide Centers of Commerce and the MasterCard Worldwide Emerging Markets Index.

Besides the suite of Indexes put forth by MasterCard, MasterCard also develops Insights reports as part of its series of ongoing research and analysis of business dynamics, financial policies and regulatory activities in the Asia/Pacific region. Over 60 reports have been produced since 2004.

The suite of Indexes and reports do not represent MasterCard financial performance.

More information on MasterCard's suite of research products can be found on www.masterintelligence.com.

MASTERCARD WORLDWIDE INDEX OF CONSUMER CONFIDENCE MARKET FINDINGS:

AUSTRALIA (24.1)

Australians are pessimistic in their outlook for the next six months. Their Index score (24.1) is much lower than that of six months ago (49.0), a year ago (42.8) and its historical average of 56.1.

Consumers are much more pessimistic than they were six months ago about Employment (9.6 vs. 35.5 six months ago), the Economy (18.3 vs. 42.1), Regular Income (37.1 vs. 62.2), the Stock Market (41.0 vs. 56.9) and Quality of Life (14.3 vs. 48.2).

For full findings on APMEA markets, please contact us for further details.

NOTE TO EDITORS: This news release is distributed with an accompanying chart that shows current MasterCard Worldwide Index of Consumer Confidence scores by market compared with several significant points in the history of the survey.

More information on the Index can be found at the website www.masterintelligence.com.

The MasterCard Worldwide Index^™ of Consumer Confidence survey has a 17-year track record of consumer confidence indices collected from no less than 200,000 interviews, unequalled both in scope and history across Asia/Pacific.

The MasterCard Worldwide Index of Consumer Confidence is the most comprehensive and longest running survey of its kind in the 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 of 20.0. This was subsequently reflected in Hong Kong's unemployment rate, which peaked just before September 2003 at eight percent.

The survey comprising the Asia/Pacific markets began in the first half of 1993 and has been conducted twice yearly since. Markets from the Middle East and Africa were included in the Index from 2004. Twenty-one markets now participate in the survey: Australia, China, Egypt, Hong Kong, India, Indonesia, Japan, Kuwait, Lebanon, Malaysia, New Zealand, Philippines, Qatar, Saudi Arabia, South Korea, South Africa, Singapore, Taiwan, Thailand, United Arab Emirates and Vietnam. The last MasterCard Worldwide Index of Consumer Confidence survey was conducted from March 23 to April 18 2009. A total of 9,211 qualified respondents were surveyed in the 21 markets with the sample being representative of the middle and upper income groups in each market. In each market except China, Egypt, India and South Africa, 400 or more people were surveyed. A minimum sample size of 600 was collected from each China, India, Egypt and South Africa.

The Index is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. Five economic factors are measured: Employment, the Economy, Regular Income, Stock Market and Quality of Life. The responses are consumers' thoughts on the six months ahead (i.e. January to June 2009). Data collection was via personal, telephone and Computer Aided Telephone interviews with the questionnaire translated to the local language wherever appropriate and necessary. The survey has a margin of sampling error of plus or minus four percentage points at the 90 percent confidence level, except China, India, Egypt and South Africa where because of the larger sample, the margin of sampling error is plus or minus three percentage points.

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.