New York – Jan. 29, 2014 – Global consumer confidence held steady at 94 for three consecutive quarters, ending 2013 one point higher than it started (Q1 2013) and three points higher than the same time period the previous year (Q4 2012), according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
Asia-Pacific posted the only regional confidence gain from the previous quarter, increasing one index point to 105, four points higher than Q4 2012. Compared to Q3 2013, consumer confidence declined three index points in North America (95), two points in Middle East/Africa (90) and one point in Europe (73); confidence remained flat in Latin America with an index of 94.
“Throughout 2013, consumers around the world remained in a virtual holding pattern as global unemployment showed few signs of progress during the year,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “Recovery continues to move very slowly and is hampered by cash-strapped consumers who grapple with having little discretionary income after paying essential expenses. As 2014 progresses, a brighter outlook is expected, but sluggishness will continue until there is a marked improvement in the jobless rate and wages go up commensurate with rising costs.”
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 30,000 respondents with Internet access* in 60 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 November 11–29, 2013, consumer confidence increased in 43 percent of markets measured by Nielsen, compared to 57 percent in Q3 2013.
Indonesia reported the highest consumer confidence index (124) for the fourth consecutive quarter, increasing four index points compared to Q3. Portugal, Italy, Croatia and Slovenia each reported the lowest consumer confidence index of 44. Colombia reported the biggest quarter-on-quarter index increase of nine points for a score of 93; Portugal saw the biggest decline, decreasing 11 index points.
Cash-Strapped Consumers Show Spending Restraint
Nielsen information shows that around the world, discretionary spending intentions declined across all categories measured in Q4 2013 and largely returned to Q4 2012 levels. Spending on out-of-home entertainment (28%) decreased 7 percentage points from Q3 to hold steady with Q4 2012. Intentions to spend on new clothes (31%), spend on holidays/vacations (32%), and invest in stocks and mutual funds (19%) each decreased 6 percentage points from the previous quarter, while saving intentions (47%), spending on new technology (24%) and spending on home improvement projects (20%) declined 5 percentage points each – within range of the same results from one year ago. Globally, 15 percent of online respondents said they had no spare cash, an increase from 13 percent reported in the previous quarter and on par with Q4 2012 findings.
“Growth in developing markets is slowing, and with weaker prospects than before, they are competing for investment and financial resources as advanced economies recover,” said Dr. Bala. “Recession-minded consumers who are already challenged by rising living expenses showed a reluctance to spend leading up to the holiday season and kept their money in their wallets.”
Recessionary Sentiment Lingers
According to Nielsen’s survey, more than half (57%) of global respondents believed their country was in an economic recession in Q4 2013, a one-point decrease from the previous quarter and a two-point decrease from the same period last year (Q4 2012).
Respondents in three-quarters of the countries surveyed feel more recessionary effects now than they did at the start of the recession. Since Q1 2008, 23 countries have reported double-digit recessionary sentiment increases, with the biggest changes in Finland (+68 percentage points), Netherlands (+47pp), Poland (+43pp), Vietnam (+37pp), Russia (+31pp), Czech Republic (+29pp), Ireland (+25pp), Venezuela (+24pp), Mexico (+22p), and India (+20pp).
Meanwhile, recessionary sentiment has gradually declined among the world’s largest economies, including the U.S., which has reported a decrease in recessionary sentiment of 14 percentage points since Q1 2008. Germany has seen a decline of 9 percentage points over the same period, and Japan’s recessionary outlook is down 3 percentage points.
“While the recovery has been painfully slow, it is important to point out that recovery in many key economies is on the right track,” said Dr. Bala. “The U.S., Germany, Japan and 33 other countries, which includes China, the United Kingdom and France, each ended 2013 with higher consumer confidence scores than at the start the year.”
Highlights from Around the World
In North America, U.S. consumer confidence declined three index points in Q4 2013 to 95, an increase of one point from the start of the year and five points from the same time period the previous year (Q4 2012). The recession was on the minds of nearly three-quarters (71%) of Americans, and the economy was the top concern for one-fourth (26%). Fourth-quarter discretionary spending intentions in the U.S. also declined from the gains reported in Q3 2013.
“While U.S. consumer confidence declined in the fourth quarter, the country is poised to be the key growth engine of the world economy in 2014,” said Dr. Bala. “One of the biggest challenges for the U.S. consumer will be getting wages and incomes to grow to support consumer demand, especially for the middle class.”
“Spending setbacks for many Americans translated to weaker-than-expected holiday sales at retail,” said James Russo, senior vice president, Global Consumer Insights, Nielsen. “Online intentions during the holiday season, however, fared better, as 46 percent said they shopped on Cyber Monday, an increase from 30 percent last year. As we enter 2014, the U.S. consumer remains cautious and pragmatic.”
In Europe, consumer confidence fell in 18 of 32 markets in Q4 2013, with the biggest index declines coming from the previous quarter’s biggest gainers. Confidence declined 11 index points in Portugal, 10 points in France and six points in Belgium, compared to Q3. However, the region’s largest economy, Germany, posted a confidence score of 95, three points higher than Q3 and eight points ahead of the same time period the previous year (Q4 2012).
“Europe has stabilized, but faces a long and gradual road to economic recovery,” said Dr. Bala. “While progress has been painfully slow, the relative levels of pessimism in the region are better than a year ago when many of Europe’s key economies hit all-time lows.”
“Germany’s healthy position among the euro-crisis countries throughout 2013 has once more impacted consumer confidence, which led to a record-high (since 2005) index reading,” said Ingo Schier, managing director, Nielsen Germany. “With the election’s coalition agreement in sight when the Nielsen survey was fielded, stable political conditions as well as good economic perspectives for 2014 seem to have given a further boost in confidence. Not even the rise of inflation and especially the rise of food prices towards the end of the year dampened the positive atmosphere.”
All confidence indicators posted marginal gains in Asia-Pacific in the fourth quarter, with a 2-percentage point increase for job prospects (62%), a 1-percentage point increase for personal finances (62%) and a 3-percentage point rise for spending perceptions over the next 12 months (43%). Consumer confidence increased in six of 14 countries, with a quarterly increase of 6 percentage points in Japan, which posted its highest index since 2005 of 80. China increased one index point in the fourth quarter for a score of 111.
“In Japan, the boost in optimism follows positive developments during 2013, which include a weaker yen that contributed to the recovery of exports and a rise in the Nikkei stock average,” said Toshihiro Fukutoku, managing director, Nielsen Japan. “In anticipation of the April 2014 sales tax hike, Japanese consumers have been spending more, but caution prevails for the second half of the year.”
India also reversed its downward confidence trend of the last three quarters by increasing three index points to 115 in Q4 2013. The percentage of Indians who said they were in a recession declined 14 percentage points to 62 percent from 76 percent in Q3 2013.
Brazil led the Latin America region with the highest index of 110, which increased one point compared to Q3 2013 and declined one point from the same time period the previous year (Q4 2012). The biggest quarter-on-quarter index increases were reported in Colombia (93), Peru (102) and Chile (99), which increased nine, eight and four index points, respectively. Conversely, consumer confidence in Mexico (78), Argentina (77) and Venezuela (74), declined 10, three and two index points, respectively compared to Q3.
In the Middle East/Africa, consumer confidence in Egypt declined 7 index points to 76, reversing its six-point index gain in Q3 2013. Most confident were United Arab Emirates (110), which decreased one index point compared to Q3 2013, and Saudi Arabia (101), which increased four index points from the previous quarter. Confidence in South Africa posted a two-point quarterly increase to 86, and Pakistan held steady at 97.
While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted November 11–29, 2013, 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 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 and mobile measurement. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA, and Diemen, the Netherlands. For more information, visit www.nielsen.com.