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 Taiwan from 76 with big decline in job prospects. 83 percent Taiwanese online respondents think the job market is “not so good” or “bad”.
Eighty-seven percent of Taiwanese online consumers think Taiwan is in an economic recession; among them, close to three in five still believe Taiwan won’t be out of an economic recession in the next 12 months. As a result, the economy (39%) is Taiwanese respondents’ biggest concern, followed by job security (23%), work/life balance and increasing utility bills (both 22%). Putting into savings (67%) and investing in shares of stock/mutual funds (32%) are still the first and second priority for Taiwanese online respondents utilizing their spare cash.
Seven in 10 online respondents said they have changed spending habits to save on household expenses. Cutting back on out-of-home entertainment (55%), cutting down on holidays/short breaks and spending less on new clothes (both 46%) are on the top of Taiwanese saving list. Saving household expenses via switching to cheaper grocery brands enjoy a 5 percentage point decrease, compared to Q3 2013.
“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.”
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.