In the second half of May 2009, the PBC conducted a survey on urban depositors in 50 large, medium and small-sized cities across the country. The survey findings are as follows:
1. The income sentiment index turned negative
In Q2, urban residents sentiment index for current income registered ?C8.6%, a sharp fall of 20 percentage points from Q1, hitting the lowest level since the survey was first conducted in 1999. Income expectations were also pessimistic, with the future income confidence index posting only 3.4%, down 14.3 and 16.9 percentage points from the previous quarter and the same period last year respectively.
2.Residents were pessimistic about current employment situation while future expectations improved slightly
45.4% of respondents reported that " it is now a tough time to get a job", 2.6 percentage points higher than Q1. By contrast, those who thought that "the situation is good for employment" only accounted for 7.8%, down 5.7 percentage points quarter on quarter. Nonetheless, expectations for the employment situation in the next quarter improved, with the employment expectations index rising 10.2 percentage points from Q1 to -2.5%.
3.Price satisfaction declined
43.3% of respondents considered current prices "too high to be accepted". This proportion was up 17.2 percentage points from Q1, close to the level recorded in the second half of 2007 and the first half of 2008 when the CPI soared. By contrast, respondents who thought that prices were "acceptable" took up a smaller share of 53.3% and only 3.5% reported "satisfactory". Consequently, the price satisfaction index dropped to -39.8% in Q2, down 21.3 percentage points quarter on quarter.
4.Preference for consumption dropped while deposit and investment preference rose
In making expenditure plans, 47% of respondents chose "more savings deposits", surging 9.5 percentage points quarter on quarter to historical high. Only 15.1% preferred "more consumption", falling 14.6 percentage points quarter on quarter to historical low. As shown by the contrast, urban residents have become more cautious in making consumption decisions, with a larger share of them receiving less income and uncertainties lingering over future income.
At the same time, as much as 37.9% of respondents chose "more investment", registering a cumulative rise of 8.8 percentage points in two consecutive quarters.
5. Home purchase sentiment stayed low while willingness to buy cars rebounded markedly
Over 60% of respondents considered current home prices "too high to be accepted", a sign that home purchase sentiment was at a low level still. 15.8% of respondents planned to buy homes in the next 3 months, down 0.9 percentage points from the previous quarter. As revealed by the survey, the share of respondents who expected home prices to rise expanded, posting 25.3%, 9.5 percentage points larger than Q1. Those who expected the opposite occupied 14.5%, losing 15.1 percentage points quarter on quarter.
Car purchase sentiment, staying high this year, hit the historical high of 12.2% this quarter, up 0.2 percentage points quarter on quarter. In particular, residents in economically prosperous small and medium-sized cities were most inclined to buy cars, registering 14.4% and 14.1% respectively.
