Global consumer confidence returned to a pre-recession level in the first quarter of 2014 – the highest score since first quarter 2007, while Australia dropped to its lowest score on record, according to Nielsen’s latest consumer confidence survey.
Consumer confidence in Australia (89 points) declined six index points in Q1 2014, the lowest score on record since Nielsen began measuring consumer confidence in 2005. More than two in five Australians (44%) felt mired in recession – up from 31 percent in the fourth quarter of 2013.
The latest results reflect Australians’ increasing concern around job prospects and the perception of the state of their personal finances. Recent announcements of significant cost reduction and off-shoring activities in the manufacturing sector in the back of 2013 and in the first quarter of 2014 has likely impacted Australians’ overall confidence levels in the country’s economic outlook.
Three in five (61%) Australians are concerned about their job prospects over the next 12 months, up 13 percentage points from quarter four and up 10 points from quarter one last year. Close to half (46%) of Australian respondents regarded the state of their personal finances to be ominous, up seven percentage points from Q4 2013.
The Nielsen findings revealed that Aussie consumers are future-proofing their assets in line with this sentiment shift, with increases across discretionary spend categories measured such as home improvement projects (+7 percentage points), putting spare cash into retirement funds (+7pp) and investing in shares of stocks and mutual funds (+2pp).
While consumers are being smart with any discretionary spend and investing for the future or paying off debt, there has been a significant increase in consumers who say they don’t have any spare cash (now one in five or 19%) – this has nearly doubled since Q1 2010. Consumers are cautious about their current ability to spend, therefore product offerings which meet consumers’ needs remains the key opportunity.
Australian Consumer Confidence
ABOUT THE NIELSEN GLOBAL SURVEY
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Feb. 17 – March 7, 2014, and polled more than 30,000 online consumers in 60 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 its 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 only on the behaviour of respondents with online access. 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.