How Happy Are Singaporeans?

Oct-Dec, 2009

One year after the Lehman Brothers collapse, the economy is showing positive signs of recovery. Are Singaporeans happier and truly optimistic about the coming year?

Our research* sheds some light.

Positive signs of economic recovery in Asia, especially China, coupled with pick-up in the equities and property markets have given us optimism as we approach 2010. In July, the International Monetary Fund (IMF) boosted its 2010 global growth forecast to 2.5%, an improvement of 0.6 points from its April forecast (Source: AsiaOne News, 'IMF projects stronger 2010 recovery from global recession', 9 July 2009).

In the same article, Olivier Blanchard, IMF Chief Economist stated that while the world economy is still in recession, recovery is in sight. According to him, financial conditions have improved and are better than expected, owing mainly to public intervention. Moreover, recent data suggests that the decline rate in economic activity is moderating.

In this light, the IMF hiked its outlook for Japan up a hefty 1.2 points from 1.7% in 2010. Growth this year in the second-largest economy was estimated to be a negative 6.0%, instead of the 6.2% contraction previously forecasted. China would lead with expansions of 7.5% in 2009 and 8.5% in 2010, while India would grow 5.4% and 6.5% respectively.

It would appear that we are finally seeing the silver lining following the post-Lehman Brothers crisis dubbed the ‘worst financial crisis since the Great Depression’. Yet some people remain apprehensive about the recovering future and whether this pick-up is sustainable. In the words of the U.S. Federal Reserve chairman, Ben Bernanke: ‘Even though from a technical perspective, the recession is very likely over at this point, it's still going to feel like a very weak economy for some time as many people will still find that their job security and employment status is not what they wished it was.’ (Source: Channelnewsasia.com, ‘Bernanke says U.S. recession likely over technically’, 15 September 2009)

As 2009 comes to a close, we take the time to poll Singaporeans aged 25 and above to find out:

How they have been affected by the dark clouds in the earlier months of this year.

If they are feeling much happier than they did in the first half of the year.

Whether they feel upbeat and confident as they enter 2010.

49% Says We Are Happier

Of those surveyed, most feel upbeat and optimistic about the future as 2009 wraps up, though a small percentage are still worried about life ahead.

A good 49% of the respondents feel happier about their lives, work and business compared to the first 6 months of the year. This result is hardly surprising given the stream of good news since mid-year and the all-round cheer that has been brought about by reports of record-breaking sales at the Great Singapore Sale and various fairs like NATAS and Comex this year.

The constant assurances that no one will be left behind in this crisis and the S$20.5 billion Resilience Package 2009 unveiled by the Singapore Government at the start of this year contributed to the general optimism of Singaporeans.

Family Remains Top Priority During The Crisis

The survey also showed that about 30% of those polled had to reduce their monthly savings during the crisis while 40% cut their personal spending in order to manage their finances. Yet, only 25% stated that they had reduced family-related expenditures. This clearly revealed that the family unit remains a top priority to Singaporeans even during the downturn. This result ties back to our earlier research in January 2009 that Singaporeans will weather the recession by cutting back on personal savings and expenditure, and will attempt to avoid impacting family expenditure negatively.

Younger Generation Is Still Spending

While the older group is able to take downturns in their stride with their experience from surviving SARS and the 1997 Asian Crisis, the younger ones aged between 25 to 34 years old are uncertain about work as well as their earning power, given that this is their first time encountering an economic crisis. However, the worrying factor is, 18% of them are increasing their personal spending instead of adopting prudent measures to ensure they are financially protected.

This phenomenon highlights the importance of nurturing financial responsibility and maturity in the younger crowd, especially in the face of a new financial world order. Focus needs to be placed on balancing priorities and opportunities while achieving a sound financial portfolio.

Staying Cautious

Though a large percentage of those surveyed expressed optimism, there are still those who remain pragmatic and cautious. One in 5 is still worried about life and work as compared to the first 2 quarters of this year; 2 in 5 people are uncertain about what lies ahead and if recovery can be sustained over a longer period.

This could be due to concerns about the fragility of the recovery and possibly, even the speed of the rebound in the property and stock markets which are making some feel uncomfortable.

The most vulnerable group is likely to consists of the ones married with children working in less senior, white-collar positions including the blue-collar workers; and those belonging to the low to below average income category. In a recent article written in The Straits Times, Manpower Minister Gan Kim Yong commented that the labour market is likely to remain weak for the rest of the year (Source: The Straits Times, ‘Rise in the chronic jobless’, 16 September 2009)

To stay competitive in this current economic climate, it is therefore important for us to press on with training and upgrading, so that we can get our workers to stay employed. These refer mainly to executives and technicians as well as those in the lower rungs of the corporate hierarchy. Workers in this category have been strongly encouraged to re-invent their skill sets or acquire new ones. On the whole, the outlook remains uncertain because companies are still adopting a conservative hiring approach.

Source: http://www.ocbc.com/personal-banking/askocbc/Talk/talk_q409_02.html?utm_source=asiaone_rotator_350x175&utm_medium=banner&utm_campaign=askocbc_nov09&u