Recessionary Sentiments Improve, While Discretionary Saving, Spending Intentions Decline from Q3
NEW YORK – FEBRUARY 5, 2013 – Global consumer confidence indexed at 91 in Q4 2012, a one-point decline from Q3 2012, but an increase of two points from Q4 2011, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy. Across the 58 countries Nielsen measured in Q4 2012, confidence declined in 33 countries, remained flat in six countries, and increased in 19 countries, compared to the prior quarter.
"Consumers around the world grappled with increasing economic concerns as the eurozone crisis spread from troubled to core countries, the United States fiscal cliff threat loomed large, and China’s rising inflation sparked monetary policy action,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “Consumers are proceeding with caution in 2013 and showed renewed discretionary spending restraint in the fourth quarter amid further global economic and political uncertainty."
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access in 58 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. In the latest round of the survey, conducted between November 10 and November 27, 2012, consumer confidence rose in one-third (33%) of global markets measured by Nielsen, compared to a 52-percent increase in the previous quarter.
More than half of global respondents (59%) said they were in a recession in Q4, an improvement from 62 percent the previous quarter and 64 percent for the same period in 2011. North America posted the most significant recessionary mindset change, as the number of Americans who said they were in a recession fell from 81 percent in Q3 to 74 percent in Q4.
While global respondents’ employment concerns remained flat at 15 percent relative to the same quarter in 2011, concerns about the economy declined three percentage points globally from Q4 2011 to 15 percent. Respondents’ concerns over increasing food prices and utility bills went up globally since the same period in 2011, increasing one and two points, respectively, to eight percent each.
Global respondents’ optimism for local job prospects held steady, with 45 percent of respondents anticipating that employment opportunities would be good or excellent in the coming year, no change from Q3 and an increase of three percentage points from the same quarter in 2011. Confidence in personal finances was 53 percent, no change from the previous quarter and an increase of one point from Q4 2011. Sixty-three percent of global respondents said it was not a good time to buy things wanted and needed over the next 12 months.
"With continuing uncertainty about the U.S. debt ceiling and mandated spending cuts, along with as-yet-tentative signs of economic stabilization in Europe, we can expect continued caution and moderate growth in the first quarter of 2013,” said Dr. Bala. “The best-case scenario would be a satisfactory political resolution in the United States, along with confidence expanding gradually throughout Europe, which would lead to an acceleration of global growth through the end of 2013 and continuing into the next year, including within the export-led economies in Asia. The major downside risk continues to be in Europe, where policy missteps within the European Union or within individual countries could damage fragile consumer confidence and take hold globally.”
Global discretionary saving and spending patterns reported declines across most lifestyle areas. Putting spare cash into savings remained a priority among 45 percent of global respondents, but declined three percentage points from Q3. Paying off credit cards and debt declined one point to 24 percent, and saving for retirement fell one point to 10 percent, compared to Q3. Spending intentions for holidays/vacations decreased two percentage points to 29 percent, while out-of-home entertainment and new technology spending plans declined one point each to 28 percent and 23 percent, respectively, compared to last quarter.
Asia-Pacific (101) and Latin America (96) reported the only quarterly consumer confidence increases, up one and two index points, respectively, compared to Q3. Middle East/Africa declined two points to 96, North America dropped one point to 90, and Europe decreased three index points to 71.
In key economies, confidence fell by one point in the United States (89), increased two points in China (108), increased one point in Germany (87) and remained flat in Japan (59). India reported the highest index at 121, a two-point increase over Q3. Greece reported the lowest index at 35, an 11-point decline from last quarter. Only 10 of the 58 countries in the survey reported a confidence index above the baseline level of 100.
North America posted the most significant decline in recessionary mindset, down 15 points from Q4 2011 to 71 percent in Q4 2012.
“North America is slowly but steadily heading in the right direction,” said Dr. Bala. “Compared to a year ago, North America showed progress toward recovery with a six-point year-on-year consumer confidence increase, driven mainly by a three-point increase in a positive job outlook, up from 37 percent to 40 percent year-on-year. With continued weakness in Europe and uneven growth in Asia, it may well be that with a brighter job market, the United States will serve as the critical engine of improved global economic activity in 2013."
Consumer confidence fell in 20 of 29 European markets, and 10 posted a confidence decline of six points or more since Q3. The biggest European decline was reported in Belgium, down 14 points from last quarter to 74. Europeans’ outlook for personal finances, job prospects and immediate spending intentions all declined last quarter.
Confidence fell in eight of 14 Asia-Pacific markets in Q4 compared to Q3 2012, with four-point declines in Hong Kong and Taiwan, but the region reported the highest consumer confidence scores overall. India topped the global list with an index of 121, an increase of two points from last quarter, followed by the Philippines with an increase of one point to 119 and Indonesia, which declined two points to a score of 117. China increased two index points to a score of 108, while Thailand (115) and Malaysia (103) also scored above the baseline of 100.
"In Q4, China's economy showed positive signs of a rebound with better than expected data for manufacturing, exports and investment which lifted consumers' optimism for job prospects and personal finances in 2013,” said Yan Xuan, president, Nielsen Greater China. “While discretionary spending remained restrained across all lifestyle areas in Q4, Chinese consumers became less concerned for the economy.”
Six of seven Latin American countries measured a consumer confidence increase in Q4. Brazil leads the region with an index of 111, an increase of one point from Q3, followed by a one-point increase in Peru (98).
Consumer confidence fell in four of six Middle East/Africa markets, compared to Q3. While United Arab Emirates and Saudi Arabia both declined by one index point each in Q4, their confidence scores of 113 and 112, respectively, are still among the highest reported of 58 countries and above the baseline of 100.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between November 10–27, 2012, 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 behavior 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 China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.
Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows, and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit nielsen.com.