Among the world’s largest economies, U.S. consumer confidence jumped 18 index points in the third quarter to a score of 119, the biggest quarterly increase and the highest index for the country in Nielsen’s 10-year consumer confidence history, according to the Nielsen Global Survey of Consumer Confidence and Spending Intentions. Confidence in Europe continued on an upward trajectory for the third consecutive quarter, as 21 of 32 countries posted index increases, resulting in a regional score of 81—the highest level since 2008. However, the consumer confidence in Taiwan was of the biggest quarterly decline of 12 points from the second quarter to the lowest level since the first quarter of 2013. The Nielsen consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions, among more than 30,000 respondents with Internet access in 61 countries.
Taiwanese consumer confidence took a dramatic drop in the third quarter, driven by double-digit declines in both job prospects (14%, -13 percentage points) and spending willingness (20%, -10 percentage points). The third factor, financial prospects, also decreased 9 percentage points to 30%. Economy situation (43%) and the work/life balance were still the top 2 biggest concerns for Taiwanese consumers that both increased 5 percentage points since last quarter. As a result, close to nine-in-ten (88%) claimed Taiwan is in recession at the moment, and over half of them (52%) said Taiwan would not be out of an economic recession in the next 12 months.
“Rising concerns for the current economic environment and work/life balance issues dominate consumer sentiment in the country. Fast-moving consumer goods value sales through August 2015 remained flat, and we expect consumer spending to remain weak in the short-term,” said Andy Huang, managing director, Nielsen Taiwan.
“Globally, this continues to be a period of economic uncertainty and thus mixed confidence trends,” said Louise Keely, senior vice president, Nielsen, and president, The Demand Institute. “Despite some mixed economic signals from the U.S., consumer confidence has strengthened and consumer spending is driving the economy. In Europe, confidence is more mixed due to variation in country-specific economic conditions; stronger confidence in Italy, Spain, and the UK reflects improving job markets, while Russia’s confidence has plummeted in the wake of an economic downturn. Latin American confidence also is mixed, but Brazil’s continued confidence decline looms large as Brazil is the largest economy in the region.”
Globally, consumer confidence increased three index points in the third quarter to reach a score of 99, the highest level since 2006, but uneven growth continues around the world as confidence stabilizes and grows in many advanced economies and declines in many emerging markets. Confidence in the Asia-Pacific region declined one index point to a score of 106, and it fell two points in Latin America (81)—the lowest score on record for the region. Consumer confidence held steady in the Middle East/Africa region with a score of 94.
SPENDING DESIRES CONFLICTED WITH REALITY
Globally, immediate spending intentions have been slowly increasing, rising from a low of 30% in 2008 during the Great Recession to a high of 43% in the third quarter of 2015. North Americans showed the biggest surge in plans to open their wallets with a 14-percentage point quarterly increase to 58%. Most other regions followed, with spending sentiment increasing two percentage points in both the Middle East/Africa (38%) and Europe (34%) and one percentage point in Latin America (33%). Spending intentions were flat in Asia-Pacific (47%).
Global discretionary purchase intentions high on the priority shopping list included spending on new clothes, holidays/vacations, out-of-home entertainment, new technology products and home improvement projects. More than half of global respondents (52%) planned to save their spare cash, an increase from 48% in the second quarter.
Despite a rise in spending confidence, however, half of global respondents (56%) still felt mired in recession in the third quarter, up from 54% in the second quarter. In fact, recessionary sentiment increased in 31 of 60 countries from the second quarter.
“Many consumers, across mature and emerging markets, have the mindset to spend across a range of consumer categories,” said Keely. “Still, a majority of consumers continue to believe their economies are in recession, even though most no longer are. Sharp adjustments in recessionary sentiment usually reflect actual changes in a country’s economic prospects, and indicate that consumers will be either pulling back on or more inclined toward spending.”
ABOUT THE GLOBAL SURVEY OF CONSUMER CONFIDENCE AND SPENDING INTENTIONS
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Aug. 10 – Sept. 4, 2015 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 includes Internet users who agreed to participate in this survey and has quotas based on age and sex for each country. It is weighted to be representative of Internet consumers by country. Because the sample is based on those who agreed to participate, no estimates of theoretical sampling error can be calculated. However, a probability sample of equivalent size would have a margin of error of ±0.6% at the global level. 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. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.