Recession-minded Europeans found a silver lining in the first quarter of 2015, despite the fact that the region remained the least optimistic globally with an overall consumer confidence index score of 77. Nielsen’s Global Consumer Confidence and Spending Intentions Survey showed that job confidence rose quarter-over-quarter in 15 of 32 European markets measured, while respondents’ personal financial outlooks increased in 18. Confidence for immediate spending intentions, while still low when compared to other global regions, increased in 19 markets.
Perhaps the most encouraging findings were seen in Italy and Greece, two of the region’s debt-ridden and recession-battered countries, which both showed confidence increases of 12-points in the first quarter. Italy’s score of 57 was the highest for the country since 2011, and Greece posted a confidence reading of 65—its highest level since 2009.
“Italy’s latest confidence increase is the most significant quarterly leap Nielsen has recorded, and it appears that recovery has started,” said Giovanni Fantasia, managing director, Nielsen Italy. “In particular, employment expectations improved seven percentage points, and there was a six-percentage point increase in personal financial outlook. These changes have had a positive effect on consumption propensity. In the first three months of the year, Nielsen retail sales data shows growth of 2%, another sign of renewed optimism about the future. While these developments are positive, further improvement will be needed to confirm the economic crisis is finally behind us.”
“In Greece, a new government was elected in the general elections that took place in January, and as such, this kind of change usually boosts optimism and brings new hope for the future,” said Vicky Grigoriadou, market leader, Nielsen Greece. “The rise in optimism in the first quarter is higher than in past quarters, likely due to an expectation that the new government will successfully negotiate with EU and IMF authorities on the Greek debt issue and other economic prospects. Retail purchasing patterns remained restrained, however, as a more stable environment is necessary in order to increase household spending activities.”
In the region, only Germany (100) and Denmark (106) reached the optimism baseline level. They were also the only two countries in the region where half (50%) of respondents were confident about immediate spending intentions.
“In Germany, a stable economic situation and a strong labor market had a positive impact on consumer confidence in the past 12 months,” said Ingo Schier, managing director, Nielsen Germany. “Compared to last year, more Germans were willing to spend money. Grocery and drug-store spending this year has been at a continuously higher level than the previous year, with sales up 1.6% and 4.6%, respectively. Rising incomes and persistently low interest rates suggest that the consumer climate will stay positive in Germany for the long-term, but terrorism concerns and armed conflicts threaten to dampen these effects.”
The region boasted other bright spots, as several other countries posted their highest confidence scores in several years: The U.K.’s score of 97 reached the highest level since 2006; Ireland (92) reached its highest since 2008, Spain (67) reached its highest since 2010, and Portugal (59) reached its highest since 2006. Conversely, ongoing geopolitical tensions between Russia and the Ukraine likely contributed to new confidence lows reported in these countries. Russia’s index fell for the second consecutive quarter to 72, a level lower than its confidence reading at the height of the Great Recession, and the Ukraine’s score dropped 11 points to 41 in the first quarter.
“The normally resilient Russian consumer is under severe strain right now,” said Kyriakos Kyriakou, regional director, Nielsen Eastern Europe. “The massive currency devaluation at the end of 2014 led to a flourish of consumer spending in an attempt to get ahead of inflation. Now, spiking inflation and negative wage growth are taking their toll. In the new market conditions, manufacturers and retailers will fight for a smaller share of shopper wallets as the majority of Russians have either switched into savings mode or have no spare cash to spend. Today, it’s more critical than ever to get the ‘price vs. volume’ equation right in order to maintain market share. Cheaper products are likely to generate more sales volumes than ever—as long as quality is not compromised.”
Other findings include:
- Consumer confidence rises one point to a global index score of 97.
- Global consumers opt to save extra cash on hand, pull back on discretionary spending.
- Nine of 14 countries in Asia-Pacific start the year at or above a baseline reading of 100.
- Concerns about the economy and job security decreased while health and work/life balance concerns increased.
- North American recessionary sentiment continued to recede, but spending intentions were restrained.
For more detail and insight, download Nielsen’s Q1 2015 Global Consumer Confidence Report.
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted Feb. 23 – March 13, 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 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. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.