Press Office

New Zealand, 8 December 2008 – Consumer confidence across New Zealand has dropped significantly from 12 months ago as a result of current economic volatility and the prospect of a global economic recession according to the latest MasterCard Worldwide Index of Consumer Confidence.

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 consumer survey which measures consumer confidence on prevailing expectation in the market for the next six months. It is calculated based upon percentage response figures, with zero as the most pessimistic, 100 as most optimistic and 50 as neutral¹.

At 33.7, consumer confidence in New Zealand continues to be pessimistic, falling 3.4 points from six months ago (37.1) and considerably lower (22.6 points) than compared to the same time last year (56.3). New Zealand’s current Index score is the country’s second lowest score in the survey’s sixteen year history - coming second only to that in the second half of 1998 (27.5).

“Not surprisingly the global credit crisis has heavily impacted economic optimism for the six months ahead. New Zealand is not alone in its sentiments, of the fourteen markets² surveyed only Vietnam, China, India and Singapore are optimistic about the first half of 2009,” said Stuart McKinlay, MasterCard New Zealand Country Manager.

For the first time in the history of the Index, New Zealanders have doubted the availability of Regular Income (35.3). This is a drop of 24 points from their optimistic view on Regular Income six months ago (59.3) and a huge drop from one year ago (80.4). New Zealand consumers are also slightly less pessimistic about the Economy (38.7 now vs. 30.1 six months ago) and the Stock Market (36.7 vs. 31.5). Research also shows consumers still feel uncertain regarding Employment (29.7 vs. 30.8 six months ago) and Quality of Life (27.8 vs. 33.8).

“Kiwis have indicated they are pessimistic across all five economic factors surveyed - employment, quality of life, economy, stock market and regular income. However, as a country we are a resilient bunch, we have bounced back quickly from low consumer confidence scores previously and tend to just get on with business,” added Mr. McKinlay.

Dr Yuwa Hedrick-Wong, economic advisor to MasterCard in Asia/Pacific said, “Consumer confidence in New Zealand is especially affected by consumers' pessimistic outlook on regular income.

“This is clearly related to their very negative outlook on the economy, against the backdrop of global recession; and concerns over rising unemployment in the coming months. The slowdown in global trade, combined with plunging demand for commodities, is hitting New Zealand's exports hard. The weak New Zealand dollar in turn is making imports more expensive; further impacting on consumers' perception of their quality of life.”

Vietnam tops the Index with a score of 88.1, the only market that has increased its score from six months ago (86.2). Vietnamese consumers are highly optimistic about Regular Income (94.7), Employment (91.2), Economy (88.2) and Quality of Life (86.9).

While China (76.6), India (63.9) and Singapore (62.3) remain optimistic about the first half of 2009, they are less optimistic than they were six months ago (China at 82.7; India at 82.1; Singapore at 87.3).

Australian consumers (49.0) are neutral in their outlook for the next six months.

At the other end of the spectrum, nine markets are pessimistic about the first half of 2009, with Hong Kong (41.8 vs. 83.1 six months ago) and Taiwan (32.1 vs. 71.3 six months ago) recording the biggest declines. Three markets, although pessimistic, have marginally improved their consumer confidence scores compared to six months ago. These include Indonesia (38.5 vs. 36.7 six months ago), South Korea (31.4 vs. 27.7 six months ago) and Thailand (26.2 vs. 23.7 six months ago). Japan, at 17.2, is much more pessimistic than it was six months ago (29.0). Consumers from the Philippines (40.0) and Malaysia (35.9) are pessimistic.

“Consumers across Asia/Pacific are clearly feeling the effects of the global credit crisis. While Asian financial institutions may be less affected by the global credit crunch and the financial sector melt down, Asian markets have been just as severely impacted; and the regional powerhouses like China and India are equally affected. While the consumer confidence scores in China and India are still optimistic, confidence levels are still much lower than they were before,” added Dr Yuwa Hedrick-Wong.

AUSTRALIA (49.0)

Australians are neutral in their outlook for the next six months, moving away from their pessimism of six months ago (42.8). Compared to a year ago (64.9) and their historical average (56.4), however, they have become less positive in their outlook.

Consumers are pessimistic about Employment (35.5), more so than six months ago (39.8) and a year ago (55.5). But they are less pessimistic than they were six months ago about the Economy (42.1 vs. 38.8 six months ago) and Quality of Life (48.2 vs. 32.7). They are more positive about the Stock Market (56.9 vs. 44.0 six months ago) and Regular Income (62.2 vs. 58.9).

CHINA (76.6)
Consumers in China continue to remain confident about the next six months despite the global financial crisis, though less so than they were six months ago (82.7) and a year ago (85.5). China’s current score is slightly ahead of its historical average of 75.6.

Although optimistic, China’s consumers are clearly less optimistic about Employment (72.8 vs. 81.7 six months ago), Economy (79.3 vs. 84.4), Regular Income (86.0 vs. 91.0) and Quality of Life (82.3 vs. 85.3) than they were. China’s overall consumer confidence score was less bullish, driven by consumer sentiments about the Stock Market (62.7), declining from six months ago (71.2) and a year ago (72.9).

Beijing (72.0) has experienced a decline in consumer confidence compared to six months ago (77.9). The outlook is holding relatively unchanged for the Stock Market (58.0 vs. 58.9 six months ago) and Quality of Life (83.1 vs. 84.1), while for Employment ( 60.0 vs. 73.8), Economy (77.2 vs. 82.6), Regular Income (81.5 vs. 90.0), there has been a decline.

Shanghai (72.9) has recorded a significant drop in its consumer confidence score compared to six months ago (95.2) and a year ago (92.1) and is also below its historical average of 78.1. Although still optimistic, consumer confidence in Employment (74.2 vs. 95.9 six months ago), Economy (76.6 vs. 99.2), and Quality of Life (77.2 vs. 100.0) have declined. Consumers have become pessimistic in their outlook on the Stock Market (47.2 vs. 91.0 six months ago)

Guangzhou (85.1) is the only Chinese city to record an increase in consumer confidence compared to six months ago (76.5) and a year ago (78.3). Consumers have become more optimistic about Employment (85.9 vs. 75.6 six months ago), Economy (84.4 vs. 71.9), Stock Market (83.9 vs. 68.1) and Quality of Life (84.4 vs. 72.6). However, their outlook on Regular Income (87.0) while still very positive, is less so than six months ago (94.4).

HONG KONG (41.8)
Consumers in Hong Kong have become pessimistic for the first time since 2003, registering a substantive drop in consumer confidence scores from six months ago (83.1) and a year ago (85.9). The current score, although below the market’s historical average of 57.5, is still higher than Hong Kong’s 1997-98 average of 16.9 during the Asian financial crisis.

Consumer sentiment is very low on the Economy (28.4 vs. 88.9 six months ago) and the Stock Market (24.1 vs. 71.2), and outlook is pessimistic for Employment (41.7 vs. 88.2) and Quality of Life (48.6 vs. 75.5). Consumers, however, continue to be optimistic about Regular Income (66.4 vs. 91.7 six months ago), although the current score is a marked decline from scores in the 90s in the last five indices.

INDIA (63.9)
Consumers in India³, though optimistic, are less so than six months ago (82.1) and a year ago (86.6). The score, only slightly better than its historical average of 62.3, is India’s lowest score since 2004.

Consumer sentiments have gone down on all five economic factors. Consumers are a lot less optimistic about Quality of Life (58.9 vs. 87.7 six months ago) and Employment (50.4 vs. 75.1). Other indicators , while also having declined from six months ago, show optimism: Economy (61.2 vs. 80.9), Regular Income (73.5 vs. 87.0) and Stock Market (75.5 vs. 79.8).

New Delhi (54.1) has experienced a significant drop from 70.3 six months ago and 78.0 a year ago to just 54.1. Of all the five economic factors, consumers are optimistic on only two: Regular Income (70.8 vs. 77.9 six months ago) and Stock Market (67.3 vs. 70.7). Consumer sentiments on Economy (50.4 vs. 68.0 six months ago) are hovering at neutral, while outlook on Quality of Life (48.2 vs. 80.3) is marginally pessimistic. Delhi’s consumers are pessimistic about Employment for the first half of 2009, with a score of 33.9, down from 54.6 six months ago and 78.6 a year ago.

Bombay (56.1) consumers have also become significantly less optimistic than they were six months ago (78.1) and a year ago (80.4). They continue to be optimistic about the Stock Market (69.7 vs. 73.0) and Regular Income (72.5 vs. 87.7), but have become neutral in their outlook on Quality of Life (51.0 vs. 82.7 six months ago). They are pessimistic about the Economy (47.8 vs. 78.3) and Employment (39.4 vs. 68.7).

Bangalore (81.4) consumers are the most optimistic in India, boosting India’s overall consumer confidence score, even though they are less optimistic than they were six months ago (96.9) or a year ago (99.0). Consumers continue to be highly optimistic about Economy (88.3 vs. 97.1 six months ago) and the Stock Market (87.8 vs. 95.1), but have become somewhat less so about Employment (79.1 vs. 100.0), Regular Income (77.6 vs. 95.2) and Quality of Life (74.4 vs. 96.9).

INDONESIA (38.5)
Following a drop six months back (36.7, from 57.8 a year ago), Indonesian consumers have become slightly less pessimistic about the next six months. They are less pessimistic about Quality of Life (27.5 vs. 17.3 six months ago) and Employment (25.4 vs. 21.4). The sentiments of Indonesian consumers about the Economy (22.6 vs. 23.8 six months ago) and the Stock Market (37.4 vs. 38.6), though, have marginally become more pessimistic. Current outlook on the Economy is the lowest since the peak of the Asian economic crisis in 1997-98.

Despite pessimistic sentiments on most of the economic factors, Indonesian consumers continue to be optimistic about Regular Income (79.7 ) as they have been in most previous surveys, even though they are less so than they were six months ago (82.4).

JAPAN (17.2)
Japanese consumers have become even more pessimistic (17.2) compared to six months ago (29.0), and a year ago (48.6), after four consecutive optimistic indices with scores over 60 from the second half of 2005 to the second half of 2007.

Current scores on the economic factors are even lower than those six months ago, with consumer sentiments on the Stock Market (15.0 vs. 32.1 six months ago) and Employment (19.9 vs. 34.5) declining the most. Consumers are also pessimistic about Regular Income (25.5 vs. 34.5 six months ago), Economy (13.5 vs. 24.4) and Quality of Life (12.4 vs. 19.5). Japanese consumers have not been this pessimistic about the Economy since the first half of 2003 (15.0).

KOREA (31.4)
Korean consumers have become slightly less pessimistic about their outlook compared to six months ago (27.7). The current score, however, is a significant drop from the consumers’ optimistic sentiments a year ago (64.1).

Consumer sentiment on Employment (20.4 vs. 16.4 six months ago), Economy (23.1 vs. 11.7), the Stock Market (49.8 vs. 48.7) and Quality of Life (18.3 vs. 15.8) continue to be pessimistic, though less so than they were six months ago. Consumer outlook remains relatively unchanged for Regular Income (45.2) compared to six months ago ( 45.9).

MALAYSIA (35.9)
Malaysia’s current index score (35.9) has dropped slightly from six months ago (36.9). This is the third lowest score since the inception of the survey in 1993, the lowest being those during the height of the 1997-98 financial crisis in the first half of 1998 (31.5) and the second half of 1998 (23.8).

Consumer confidence across three of the five economic factors has fallen even further than the scores six months ago, with sentiments on the Economy (23.6 vs. 33.6 six months ago), Stock Market (32.8 vs. 37.6) and Employment (38.1 vs. 42.6) becoming even more pessimistic. Malaysians have, however, become less pessimistic on both Regular Income (44.9 vs. 39.5 six months ago) and Quality of Life (40.2 vs. 31.2).

PHILIPPINES (40.0)
Philippines’ consumers continue to be pessimistic, with their consumer confidence score lower than that six months ago (43.2) and below that of a year ago (67.7). It is also below the market’s historical average (50.5).

Consumers are pessimistic on all factors except Regular Income (83.1) where their sentiments have become more optimistic compared to six months ago (78.4). While they have become slightly less pessimistic on the Stock Market compared to six months ago (41.0 vs. 38.1 six months ago), they have become more pessimistic on Employment (23.1 vs. 28.7), Economy (29.3 vs. 35.5) and Quality of Life (23.3 vs. 35.4).

SINGAPORE (62.3)
Despite being a regional financial center amidst the global financial turmoil, Singapore is one of the four markets that are optimistic about the first half of 2009. However, Singapore consumers are much less optimistic than they were six months ago (87.3) and a year ago (83.6). Their consumer confidence score has dropped below the market’s historical average of 67.6.

While consumers continue to be optimistic on most of the factors, they are less so compared to six months ago. They are optimistic about Employment (68.6 vs. 98.1 six months ago), Economy (66.8 vs. 93.4), Regular Income (66.6 vs. 85.9) and Quality of Life (63.7 vs. 79.0). Outlook on the Stock Market (45.9 vs. 80.0 six months ago), however, has however become pessimistic.

TAIWAN (32.1)
Taiwan consumers, who became optimistic for the first time six months ago after seven consecutive highly pessimistic periods, turned pessimistic again. Their current index score is a significant drop from that of six months ago (71.3) but is slightly better than a year ago (29.7).

Consumer sentiments have dropped to pessimistic levels on all five factors: Employment (25.0 vs. 75.0 six months ago), Economy (32.1 vs. 79.8), Regular Income (31.7 vs. 53.6), Stock Market (35.8 vs. 81.1) and Quality of Life (35.8 vs. 67.3).

THAILAND (26.2)
Thai consumers continue to be pessimistic, though confidence levels have risen slightly from six months ago (23.7). The current score, however is much lower than a year ago (44.2).

The political strife in the country seems to have impacted consumers’ confidence as they continue to be pessimistic about Employment (21.1 vs. 22.2 six months ago), Economy (22.4 vs. 16.2), the Stock Market (24.3 vs. 17.2) and Quality of Life (17.8 vs. 12.6) and Regular Income (45.4 vs. 50.5).

VIETNAM (88.1)
Vietnam, the most optimistic market surveyed in the Index, is marginally more optimistic than it was six months ago (86.2) but lesser than a year ago (94.3). The current score is also slightly below Vietnam’s historical average of 91.4.

Consumers continue to be upbeat about all factors, including Employment (91.2), where the score remains unchanged from six months ago, Economy (88.2 vs. 84.0 six months ago), Regular Income (94.7 vs. 97.0), Stock Market (79.4 vs. 72.7) and Quality of Life (86.9 vs. 86.0).

Although highly optimistic, the current score is the second lowest for Vietnam since its inception in the Index in 2003.

NOTE TO EDITORS: This news release is distributed with an accompanying chart (see page 9) 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 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, 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. Sixty-three reports have been produced since 2004.

The MasterCard Worldwide Index™ of Consumer Confidence survey has a 16-year track record of consumer confidence indices collected from more than 160,000 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. More recently 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 began in the first half of 1993 and has been conducted twice yearly since. 14 markets participate in the survey: Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan, Thailand and Vietnam. The last Asia/Pacific MasterCard Worldwide Index of Consumer Confidence survey was conducted from 1 September and 29 September 2009. 6,019 qualified respondents were surveyed in the 13 markets with the sample being representative of the middle and upper income groups in each market. In each market except China and India, 400 or more people were surveyed. In China and India, a total of 600 interviews were conducted in Beijing, Shanghai and Guangzhou, and New Delhi, Mumbai and Bangalore.

The Index is calculated based upon percentage response figures, 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, where because of the larger sample, the margin of sampling error is plus or minus three percentage points.

About MasterCard Worldwide

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 over 18 billion transactions each year, and provides industry-leading analysis and consulting services to financial institution customers and merchants. 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 visit: www.mastercard.com.

Note:The Crisis period in the chart above is based on the reflection of the MasterCard Worldwide Index™ of Consumer Confidence results, which may or may not coincide with actual chronology or the definitions of others.

Historical Average is the mean average of all Index scores up through six months ago but not including the current Index.

* The average excludes Vietnam as this market was not surveyed in 1997/98.