Global consumer confidence ended 2015 on a subdued note as the index declined two points from the third quarter to 97—the same score as the start of the year. After growing consistently in past quarters, Belgium’s confidence dropped 6 points to 78—slightly under the general sentiment in Europe (81).
“Confidence levels throughout 2015 reflect the varied ways that consumers filtered economic events within their regions and globally,” said Louise Keely, senior vice president, Nielsen, and president, The Demand Institute. “Many emerging markets—though not all—are in slower growth environments, and confidence trends vary accordingly. European consumers on the whole have remained relatively resilient despite continued economic uncertainty, and while the U.S. is a relative bright spot in the global economy, consumers are still taking a cautiously optimistic attitude to their near-term futures.”
In the latest online survey, conducted Nov. 2–25, 2015, consumer confidence increased in 26 of 61 markets measured by Nielsen (43% of measured markets). India’s score of 131 was the highest level, with no change from the third quarter, and South Korea’s was the lowest at 46, a quarterly rise of four points. Among the world’s largest economies, China’s score was 107, a rise of one point from the third quarter, followed by the U.K. (101), the U.S. (100), Germany (98) and Japan (79), which all showed quarter-on-quarter confidence declines.
Fears about terrorism escalated to new highs in the fourth quarter of 2015 in North America (27%) and Europe (22%) and have become a bigger concern than the economy in both regions. In the U.S., 29% of online respondents said terrorism was their biggest or second-biggest concern, an increase of 15 percentage points from the third quarter. In Europe, concern levels were also high and grew significantly from the third to the fourth quarter in Israel (43%, +24pp), the U.K. (32%, +11pp) and the Netherlands (26%, +8pp). Levels were very high or high and remained relatively stable quarter-on-quarter in Turkey (56%, -2pp), France (25%, -1pp), Czech Republic (24%, +1pp), Switzerland (23%, +1pp) and Germany (23%, no change).
Interestingly, though Belgium reached an unprecedented level 4 security alert during the fourth quarter, where schools and public transportation systems were preventatively shut down, terrorism (21%, +2pp) still wasn’t the highest concern for consumers in the fourth quarter—increasing utility bills were (25%,
Immigration concerns also escalated in North America (29%), as just under one-third of Americans (32%) said it was their biggest or second-biggest worry, a rise of 26 percentage points from the third quarter making it the number one concern in the country. Immigration anxieties were also notably high in central European and Scandinavian countries, with levels highest in the Czech Republic (36%), Sweden (28%), Germany (27%), Austria and Norway (26% each), the U.K. and Switzerland (22% each) and Finland (21%)—most with significant quarter-on-quarter increases.
"Consumer concerns about terrorism and immigration have risen in recent quarters in those countries most affected by recent related events," said Keely. "We continue to monitor the effects that these demographic and political issues may eventually have on consumer spending. In general, it is big and unexpected events that are likely to be the most disruptive for consumers.”
More than half (55%) of respondents around the world believed they were in recession in the fourth quarter of 2015, which increased slightly from the start of that year (53%). Recessionary sentiment was strongest and above 90% in Venezuela (96%), Ukraine (95%), Brazil (93%) and South Korea (91%). Sentiment was lowest and below 40% in China (29%), Czech Republic (33%), Denmark (34%), New Zealand (37%) and Germany (38%).
Recessionary sentiment improved most in Latvia (59%, -11pp), Estonia (46%, -10pp), Italy (80%, -9pp) and the U.S. (47%, -8pp) from the third quarter. Conversely, fourth-quarter recessionary sentiment worsened most in Sweden (62%, +13pp), Singapore (40%, +10pp), United Arab Emirates (53%, +10pp) and Norway (63%, +10pp).
In the U.S., the percentage who believed they were in recession fell under 50% for the first time since 2008, when Nielsen began tracking recessionary sentiment. "The U.S. economy is on a solid footing, and the path to recovery is holding steady," said Keely. "American consumers have experienced continued job creation and lower gas prices, along with some wage growth. So it is remarkable that, while the share of consumers who believe the U.S. economy is in recession has fallen steadily, it is still as high as it is. This ‘overestimation’ on the part of consumers is a global phenomenon and reflects the large number of consumers who continue to feel uncertain about their economies overall.”
India's recessionary sentiment, on the other hand, is notably high (50%) given their optimistic confidence index score of 131. "Indian consumers are confident, but they are not without their worries, and global companies need to serve them with the same degree of smart insight and sophistication as they do consumers in developed markets," said Keely. "Consumption represents nearly 60% of GDP in the country, so consumers are an important economic driver for India. As both the population and its spending power grow, the Indian market opportunity will be increasingly important to global companies."