Global consumer confidence ended 2014 with an index score of 96—a decline of two index points from the previous quarter, which comes after several quarters of positive momentum, according to a new study by Nielsen, a leading global provider of information and insights into what consumers watch and buy. While confidence fell slightly in every region in the fourth quarter from the previous quarter, year-over-year, the index is still above a pre-recession level of 94 from third-quarter 2007. The index of consumer confidence of Taiwan declined 2 points to 77 due to the increasing of pessimistic levels of job prospects and the consideration over the good time to buy needed items.
More than four-fifth of Taiwanese respondents thought that the country is now in an economic recession; only eleven percent said Taiwan would be out of economic recession in the next year. As a result, the economy (40%) is the top concern for Taiwanese consumers, followed by work and life balance (24%), and job security (22%) that increased five percentage points compared to last quarter. Not surprisingly, saving (67%) and investing in shares of stock/mutual funds (36%) are the most popular “spending items” for Taiwanese consumers when asked of how to spend their spare cash.
Around seven-tenth of respondents said, compared to the same time last year, they have changed their spending habits to save on household expenses majorly by cutting down out-of-home entertainments (51%), spending less on new clothes (40%), shortening holiday/short breaks, and switching to cheaper grocery brands (both 39%).
Consumer confidence declined one point in North America (106) and Asia-Pacific (106) in the fourth quarter—the only regions to score above the baseline reading of 100. Confidence also decreased one point in the Middle East/Africa (95), three points in Latin America (88) and two points in Europe (76) from the previous quarter.
Among the world’s biggest economies, consumer confidence decreased two points in the U.S. (106), four points in China (107) and four points in Japan (73). Conversely, confidence rose one point each in Germany (98) and in the U.K. (94).
“Confidence in more than half of the global markets measured retreated slightly in the fourth quarter with continued geopolitical tensions and some slowing in emerging-market growth,” said Louise Keely, senior vice president, Nielsen and president, The Demand Institute. “Latin American markets, such as Brazil, saw particularly large declines in confidence compared to last quarter and a year ago, reflective of the economic slowdown there. While recovery in Europe continues to be weak, and there is recent speculation of quantitative easing by the European Central Bank, confidence is still up slightly in most economies from a year ago, suggesting that fears of yet another eurozone recession have not yet hit overall consumers’ outlook. In the U.S., where labor markets have continued to recover, confidence is up significantly from its level a year ago.”
IT’S NOT ALL BAD NEWS: YEAR-OVER-YEAR PERFORMANCE IS POSITIVE
Progress is slow, but it is indeed taking place in more than half of global markets measured. Confidence scores in 39 of 60 markets improved year over year. Eleven markets reported double-digit confidence climbs, including the U.S. and the U.K., which rose 12 and 10 points, respectively. Other notable increases from the previous year include Romania (+15), India (+14), Egypt (+14) Ireland (+13) and Bulgaria (+13).
Year-over-year key indicator performance metrics improved most dramatically in North America. Job prospect expectations rose 12 percentage points to 50%, the state of personal finances increased six percentage points to 64% and immediate spending intentions jumped eight percentage points to 51% in the 12-month period.
Just under half of global respondents (49%) believed the job market would be good or excellent in the next 12 months, up from 47% in fourth-quarter 2013. Likewise, perceptions of personal finances slightly improved to 56% (from 55% the previous year) and immediate spending intentions rose to 40% (from 38%).
“There was a small step back in the fourth quarter reflecting some increased consumer apprehension, following improvements across the whole of 2014,” said Keely. “Some regions of the world are still not out of the woods, including the eurozone, while others—like China and some Latin American countries—may be entering a period of slower growth in 2015.”
RECESSIONARY SENTIMENT IMPROVED FOR MOST IN 2014
Just over half of the global respondents (53%) believed they were in a recession in the fourth quarter, a one-percentage point improvement from the previous quarter and a four-point improvement from the previous year (Q4 2013). In total, 58% of global markets measured reported a year-over-year recessionary-sentiment improvement.
Global discretionary spending/saving intentions were either flat or declined slightly in the fourth quarter. Almost half (48%) plan to save their spare cash, about three-in-10 expect to spend on holiday/vacations (34%), new clothes (34%) and out-of-home entertainment (30%). One-fourth of global respondents plan to buy new technology (24%) and pay off debts (25%). One-fifth will spend on home improvements (21%) and invest in stocks (21%), and one-in-10 will save for retirement (10%). Globally, 13% of respondents said they have no spare cash.
ABOUT THE GLOBAL SURVEY
The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005. This Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Nov. 10-28, 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 and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country.
Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The China Consumer Confidence Index is compiled from a separate mixed methodology survey among 3,500 respondents in China.
The sub-Saharan African countries in this study are compiled from a separate mobile methodology survey among 1,600 respondents in Ghana, Kenya and Nigeria. These three countries were added to Nielsen’s measurement of consumer confidence in the first quarter of 2014 using a mobile survey methodology, which differs from the online methodology used to report consumer confidence and spending intentions for the other 60 countries outlined in this report. As such, the three sub-Saharan African markets are not included in the global or Middle East/Africa averages discussed throughout this report.
Nielsen 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.