55 Percent of Global Consumers Surveyed Believe They Were in a Recession in Q2, the Lowest Level in Two Years
Discretionary Spending Intentions Increase Around the World in Q2
New York – July 23, 2013 – Global consumer confidence indexed at 94 in Q2 2013, a one-point increase from Q1 2013 and an increase of three points from Q2 2012, according to consumer confidence findings from Nielsen, a leading global provider of information and insights into what consumers watch and buy.
“While confidence in Europe remained in a holding pattern as financial conditions stabilized, perceptions about jobs, personal finances and spending intentions increased in the world’s three largest economies—U.S., China and Japan—which is having a beneficial effect around the world,” said Dr. Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen. “However, concerns remain that macroeconomic events, such as too sharp a rise in interest rates, can impair the consumer recovery, including lowering the demand for home purchases and spending on big-ticket items.”
The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, measures consumer confidence, major concerns, and spending intentions among more than 29,000 respondents with Internet access* in 58 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 between May 13 and May 31, 2013, consumer confidence rose in 45 percent of global markets measured by Nielsen, compared to 60 percent in the previous quarter.
Improved Recessionary Mindset
While more than half (55%) of global respondents believed they were in a recession in the second quarter, it was the lowest level reported in two years (since Q1 2011). North Americans reported the biggest quarterly recessionary mindset decline of six percentage points to 69 percent, the lowest level since Q3 2007 or before the Great Recession.
“The improved recessionary sentiment among North Americans was driven by positive macro-economic developments in the U.S.,” said Dr. Bala. Seventy-two percent of U.S. respondents said they were in a recession—a five percentage point improvement from Q1 and a 15-percentage point change from a five-year average (2008–2012), when 87 percent of Americans said they felt they were in a recession. Concern about the U.S. economy also reported a marked decline of eight percentage points among American respondents in the second quarter, dropping to 19 percent.
“There is increasing evidence that the U.S. economy is improving,” said James Russo, senior vice president, Global Consumer Insights, Nielsen. “While the unemployment rate is trending steadily downward to the current 7.6 percent, the biggest drivers of change include the record gains in equity markets and the housing rebound, which are clearly impacting household wealth and spending potential.”
Nielsen information showed second-quarter recessionary sentiment declines in the Middle East/Africa, which dropped four percentage points to 73 percent; in Europe, which fell two points to 74 percent; and in Asia-Pacific, which declined one percentage point to 40 percent. In Latin America, 56 percent of respondents said they believed they were in a recession, an increase of six percentage points since Q1 2013.
More Spare Cash, More Spending
On average, discretionary spending intentions for new clothes, holidays/vacations, out-of-home entertainment, and new technology products increased around the world in the second quarter. Forty-seven percent of global respondents saved their spare cash, 19 percent invested and 11 percent saved for retirement. Globally, 14 percent said they had no spare cash, a decrease from 15 percent reported in Q1 2013 and Q2 2012.
According to Nielsen’s survey, respondents in Asia-Pacific reported the most significant quarterly spending increase (up four percentage points) on holidays/vacations (43%), new clothes (39%), out-of-home entertainment (38%) and new technology products (34%). Respondents in Asia-Pacific also saved the most, compared to respondents in other regions, with 61 percent putting money into savings accounts and one-third (32%) investing in shares of stocks and mutual funds.
In the Middle East/Africa region, discretionary spending intentions for out-of-home entertainment (21%) and holidays/vacations (18%) increased in the second quarter four and five percentage points, respectively. Marginal spending increases (up one percentage point) for clothing, technology, decorating and vacations were reported in Latin America compared to the previous quarter. Saving and spending intentions among European respondents remained flat in the second quarter.
Consumer confidence increases were reported in Asia-Pacific (up two points to 105), North America (up two points to 96) and Middle East/Africa (up six points to 91), compared to the previous quarter. Europe’s consumer confidence index remained flat at 71 for three consecutive quarters and Latin America’s confidence declined one index point to 93 in Q2.
In key economies, consumer confidence increased three points in the United States (96), increased two points in China (110), increased five points in Japan (78) and remained flat in Germany (90). Indonesia reported the highest index at 124, a two-point increase over Q1. Portugal reported the lowest index at 33, flat with Q1. Nine of the 58 countries in the survey reported a confidence index above the baseline level of 100.
Consumer confidence declined in 14 of 29 European markets, and the region included nine of the bottom 10 consumer confidence index scores, including Hungary, Italy, France, Greece and Spain. Confidence increased in thirteen European markets, including the United Kingdom, up four index points to 79.
Overall confidence in Asia-Pacific remained high, with seven markets reporting indexes above the 100 baseline. In addition to China’s increase, Indonesia (124) and the Philippines (121) reported increases in the second quarter of two and three points, respectively. India (118), Thailand (114), Hong Kong (107), and Malaysia (103) declined two, one, one, and four index point(s), respectively.
Consumer confidence in Latin America decreased for the second consecutive quarter, declining one index point from Q1 2013 to a score of 93. Brazil led the region with the highest index of 110, which decreased two points in the second quarter. Peru (99) and Colombia (87) reported increases while Venezuela (68) reported declines for three consecutive quarters, and Chile (94), Argentina (68), and Mexico (84) each declined for the second straight quarter.
Consumer confidence increased in four of six Middle East/Africa markets, as Pakistan (98) reported the biggest three-month increase of 11 index points, followed by a rise of four points in Saudi Arabia (100), three points in Egypt (77) and South Africa (81). Confidence declines were reported in United Arab Emirates (107) and Israel (83), which declined one and eight points, respectively.
In North America, while the U.S. saw an increase in consumer confidence, Canada declined four points to an index of 98.
*While an online survey methodology allows for tremendous scale and global reach, it provides a perspective on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.
About the Nielsen Global Survey
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between May 13-31, 2013, and polled more than 29,000 online consumers in 58 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.
Jennifer Frighetto, 847-605-5686, [email protected]
Elizabeth Wolf, 646-654-5825, [email protected]