Consumer confidence levels rose in 20 of 29 European countries in the first quarter of 2013, according to results from the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions.
However, despite a complete reversal of results from the fourth quarter of 2012 when confidence fell in 20 countries, European confidence overall remains pessimistic. Average confidence levels held at 71 index points, far below the 100 point level that indicates an optimistic outlook.
The biggest consumer confidence increases in Europe were reported in Slovakia and Finland, up seven points each to an index of 64 and 76 respectively. A quarterly increase if six index points was also reported in Denmark (95), Czech Republic (68), and Hungary (43). Norway (106), up four points, remains the only measured country in Europe enjoying net optimism.
Germany (+4) and France (+3), along with many other surrounding central and northern European countries also reported increases in positive sentiment for local job prospects, personal finances and spending intentions, returning to year-ago levels after a general dip. Unemployment levels throughout much of the Euro zone however remain high.
“These latest figures show some promising signs for Europe, although consumer confidence within the region remains polarised between debt-challenged southern European markets and recovering central and northern markets,” commented Nielsen European president, Christophe Cambournac.
“Following the European Central Bank’s measures to preserve the Euro last year, fears of the debt crisis spreading beyond recession-hit southern European countries may have eased in the first quarter,” continued Cambournac. “However, weak labour market conditions in troubled economies, including Greece, Ireland, Italy, Portugal and Spain, and the recent Cyprus financial crisis are further indications of the fragile state of the European economy, which continues to hinder a full recovery in the region.”
Despite confidence rises in many European countries, Europe also now hosts 15 of the 16 countries with the lowest measured consumer confidence. The biggest fall in the last quarter was in Portugal, which dropped seven points to 31, the lowest reported score for the country since the first Nielsen consumer confidence index was established in 2005.
With public debate continuing around expected immigration next year from Romania and Bulgaria to the UK and a number of other EU countries, Romania dropped a further two points in Q1 to 59 – its lowest level since Q4 2011 – while Bulgaria fell four points to 57.
It’s not all gloom though. Greece (40), Italy (44) and Spain (47) were among the lowest reported consumer confidence scores of the 58 countries measured, but these countries did report growing optimism in Q1 over the previous quarter.
Recessionary sentiment steady but cost-cutting falls
The number of European respondents who believe their country is in a recession increased by one point to 76 percent – and only 11 percent believe they’ll be out of recession in the next year, the same as in the previous quarter. However, the number of European respondents changing their spending habits to save on household expenses dropped significantly from 67 percent to 62 percent in Q1 – its lowest level since Q3 2011. Greeks (93 percent) are the most likely to do this, while Germans are the least likely (33 percent). This compares to 66 percent of Britons and 70 percent of French consumers.
The three most popular methods of cost cutting are spending less on new clothes (54 percent), followed by cutting down on out-of-home entertainment activities (53 percent) and trying to save on gas and electricity (52 percent). The numbers switching to cheaper grocery brands to save money dropped from 52 percent to 50 percent. Over half of Britons (58 percent) are switching to cheaper grocery brands compared to 54 percent in France and 66 percent in Germany.
Spare cash goes into savings or new clothes
For the second successive quarter, just 21 percent of European respondents report having spare cash once they’ve covered essential living expenses. The number of Britons reporting this increased dramatically from 22 percent to 30 percent, compared to just 18 percent in Germany and 23 percent in France.
Among European respondents with spare cash, one third (34 percent) say they save it – the highest level since Q1 2011 – 30 percent indicated it will go on new clothes, while 29 percent plan to spend it on holidays.
Cambournac concludes: “Despite spare cash levels remaining consistent and saving activity reaching a two year high, European consumers appear less cautious about spending as cost-cutting activity has declined to its lowest level since the third quarter of 2011. It remains to be seen however if this is simply an initial effort to start the year in a more positive frame of mind or indicative of a continuing and encouraging trend for the year.”
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between February 18–March 8, 2013, and polled more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa, and North America. The sample has quotas based on age and sex for each country based on their Internet users, is weighted to be representative of Internet consumers, and has a maximum margin of error of ±0.6%.
This Nielsen survey is based on the behaviour of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60-percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.