Key findings from the third quarter Nielsen Global Consumer Confidence Index report that consumers find a full economic recovery in 2010 to be highly unlikely:
- Consumer confidence declined in 19 of 53 global markets.
- One in four North Americans and one in five Europeans have no discretionary income.
- Rising food prices are a top concern for one in four Asians.
- Increasing utility prices are Europeans’ biggest concern.
- Recovery is back on track in North-West Europe, while the recessionary mindset lives on in Southern Europe.
- Nine of the top 10 most confident nations hail from the Asia Pacific region.
After an upbeat start to the year with two consecutive quarters of increased optimism, global consumer confidence fell three points in September to an Index of 90, according to the latest edition of the Nielsen Global Consumer Confidence Index. Consumer Confidence Index levels above and below a baseline of 100 indicate degrees of optimism and pessimism. The 90 Index mark reflects that consumers around the world are largely pessimistic about job prospects, personal finances and their ability to buy the things they want and need over the next year.
While positive sentiment drove confidence levels up in the first half of this year, consumer confidence declined in 19 of 53 global markets in the third quarter.
“There simply hasn’t been enough consistent and positive news to sustain the positive outlook and momentum that consumers showed at the start of this year”, said Dr. Venkatesh Bala, Chief Economist at The Cambridge Group, a part of The Nielsen Company. “The reversal of global consumer confidence in the third quarter highlights the fragility and uncertainty of the current global economy, its ongoing vulnerability to macroeconomic shocks and, finally, the divergence in the pace of recovery among international markets and regions.”
For many consumers, spending on non-essential goods has become more restrained this year compared to the height of the global recession two years ago. Discretionary income reached an all time low for many consumers in the third quarter, with 27 percent of Americans, 19 percent of Europeans, 17 percent of Middle Easterners/Africans and 16 percent of Latin Americans left with no spare cash after paying essential living expenses.
Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 26,000 Internet users in 53 countries. In the latest round of the survey conducted between September 3 and September 21, 2010, consumer confidence in most markets showed continued spending restraint. More than half (56 percent) of global consumers believe they are currently in recession and 48 percent do not believe they will be out of a recession in the next 12 months.
“While slipping back into a full blown global recession is unlikely, in the last few months consumers have accepted that there are no quick fixes to the persistent economic issues of unemployment and government budgetary woes that continue to dampen and constrain economic revival,” said Rick Kash, CEO of The Cambridge Group and co-author of How Companies Win, a new book written with Nielsen CEO David Calhoun. “Tapping into consumers’ need states to understand latent demand has never been more important.”
In addition to economic issues, many consumers in Asia and Europe are grappling with additional concerns such as rising food and utility prices, which are squeezing already constrained family budgets. In Europe, increasing utility bills replaced the economy as the number one concern over the next six months and in Asia Pacific, one in five consumers are most concerned about rising food prices — an increase of 13 points over the second quarter of 2010.
The economy remains the number one concern for more than one in four North Americans (27 percent) and worries about health jumped five percentage points. Health is now the number one concern for 10 percent of respondents in North America. Among Latin American consumers, consumers ranked work/life balance, job security, debt, crime and children’s education ahead of the economy as the number one concern.
Download the Nielsen Global Consumer Confidence report for a country-by-country analysis and region-level review.